China’s New Cybersecurity Law Rattling Foreign Firms

China’s new Cybersecurity Law goes into force on Thursday with an aim to tighten what is already one of the world’s most restrictive online environments.

With more on this and other news around the world we turn to Ro Aram.
Aram… the law seeks to protect China’s networks and private user data, but foreign firms are concerned about its potential impact on their ability to do business in the world’s second largest economy….

That’s right Jihye… companies have been urging the Chinese government to delay the legislation’s implementation, but these calls have fallen on deaf ears.

To add to concerns, the language of the new law, which was adopted last November, was tweaked recently to broaden the scope of those affected by it.
Multinationals are worried it may discriminate against foreign businesses and that its requirements on matters such as technology disclosure and encryption could give Chinese companies an unfair advantage.

Data collected within China will have to stay inside the country, raising suspicions that Beijing could steal trade secrets or intellectual property from foreign companies doing business there.

They are also concerned about the vagueness of the legislation as those subject to the restriction of data transfer outside of China’s borders have now been classified as “network operators” which could mean any business regardless of size.

They want more clarification on what businesses will be affected and to what extent, hence the calls for a delay.

Although some have praised the new law’s implementation, especially amid recent fears over the global WannaCry ransomware attack, companies are jittery about their products having to go through even tougher security checks, which could lead to some being banned from the country.

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2 Comments
  1. Khaled eliwa says

    Dear Richard

    I am khaled eliwa from Egypt I has trading company in china but really don’t understand this new policy can help me to explain it
    Khaled

    1. Richard Rossington says

      Hi Khaled,
      this relates to data security law that came into effect last week in China and business who don’t comply could incur large fines of up to $150,000.
      The law focuses on protecting personal information and individual privacy, and standardizes the collection and usage of personal information.
      If you need more information I would suggest seeking professional legal advice in regards to your trading company.

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