New Regulations from China Upset Foreign Tech Companies
The Government of China has set new rules and regulations for foreign companies who sell computer equipment to Chinese banks.
The new regulating policy, passed in last year, is outlined in 22-pages document in which, according to The New York Times, the government has demanded companies to forward the source code, yield to audits and, as extra security measures, build backdoor into hardware and software.
The Times reported that the US Chamber of Commerce along with many other foreign business groups has reacted to this initiative by Chinese government and has sent an objection latter to cybersecurity community, led by President Xi Jinping, in China.
In the letter, the companies have expressed their reservations, which rose after the distribution of the copies of new rules in the past month, saying that this act could lead to a serious and broader “cbersecurity review regime” by the Chinese government, and that they amount merely to the protectionism.
The companies are fearful that the authorities are hindering the way for their business in one of the largest markets of the world.
Analysts seem agreeing with the voices from many multinational companies. According to a research, China is likely to spend more than $400 billion in the information and tech sector, and thus, Beijing wants to minimize the foreign concentration.
“I think they’re obviously targeting foreign vendors that are operating in China,” said Matthew Cheung, a researcher at the analytics firm Gartner. “They are promoting the local technologies so that local providers who have the capabilities to provide systems to these enterprises can get more market share.”
Interestingly, Apple has recently settled to accept the new Chinese policies for doing business in the territory. Probably, it was compelled by the vast market to kneel down.
However, the current rules and regulations from Beijing can not be considered as greedy game to secure more dollars and to stop the multinational companies from doing so, another serious issue is hidden in the current circumstances – often termed as Chinese cyberwarfare.
It has been said that China has been trying to spy on foreign countries. Recently, many events strengthen this claim. For example, investigation of a Chinese phone-maker company ‘Xiaomi’ by the Hongkong government. Xiaomi is alleged for giving China access to the users’ information without their consent.
Similarly, a tech giant from Beijing, Huawei is banned from starting broadband projects in Australia and America for giving Beijing an access to the sensitive data.
Likewise, a report by US security company called Mandiant claimed that China was behind the large number of website hacking, just for the cause of stealing data.
Cyberwarfare, protectionism or business interests – whatever name is given to the present tension between Chinese government and multinational tech companies, recent cases of investigation on couple of Chinese companies in Hong Kong, Australia and USA, make me think: something furtive is there. May be, it’s true that Beijing has been showing interest in sensitive data of the foreign nations. May be, Not.
Abubaker Zahoor writes on diverse topics with special interest in innovations, tech-ethics, and inter-and intra- organizational business relationships.