Foreign firms grapple with China’s ‘punitive’ cybersecurity laws
Overseas business groups say new regulations force them to give authorities access to sensitive data and more restrictions are being added that will favour local firms
Just days before China’s new cybersecurity law goes into force, foreign companies are grappling with rules that could tighten what is already one of the world’s most restricted technology regimes.
Recent changes to the language of the law ahead of its June 1 implementation, such as a broader definition of those affected, could drag in a wider array of services and products. While industry groups are lobbying for a delay, the government is moving ahead.
China is bringing in a raft of new measures, giving the government unprecedented access to foreign companies’ technology, as it bolsters control of the collection and movement of data. Forcing companies to store information within the mainland has already led some to tap cloud computing providers with more local server capacity, a potential boon to homegrown Alibaba Group Holding and Tencent Holdings Ltd. at the expense of Amazon.com and Microsoft. Alibaba Group is the owner of the South China Morning Post.
“Almost all our companies are making moves to ensure that the majority of the data they collect in China is stored on servers located within China,” said Jake Parker, vice-president of the US-China Business Council in Beijing. “It’s not just the technology companies – it’s financial services, semiconductor manufacturers, every sector of business in China, that’s impacted.”
One organisation that could feel the pinch of the regulations is GreatFire.org, which monitors blocked websites in China and helps users behind the nation’s controls. The non-profit group creates copies of banned sites hosted outside the mainland, putting them on Amazon Web Services cloud servers to circumvent government restrictions known as the Great Firewall.