Legislation creates concerns foreign companies may need to hand over intellectual property and help security bureaux in return for marketplace access
China adopted a controversial cybersecurity statute on Monday that it told would tackle growing threats such as hacking and terrorism but has triggered fear from foreign business and rights groups.
The legislation, passed by Chinas largely rubber-stamp parliament and set to come into consequence in June 2017, was an objective need of China as a major internet power, a parliamentary official told.
Overseas critics argue it threatens to shut out foreign technology companies and includes contentious requirements for security reviews and for data to be stored on servers in China.
Rights advocates also say the law will stiffen restrictions on Chinas internet, already subject to the worlds most sophisticated online censorship mechanism, known outside the country as the Great Firewall.
Yang Heqing, an official on the National Peoples Congress standing committee, said the internet was already profoundly links between Chinas national security and developing.
China is an internet power, and as one of the countries that faces the greatest internet security risks, urgently needs to establish and perfect network security legal systems, Yang said at the close of a bimonthly legislative meeting.
More than 40 global business groups petitioned the Chinese premier, Li Keqiang, in August, exhorting Beijing to amend controversial segments of the law. Chinese officials have said it would not interfere with foreign business interests.
Contentious provisions remained in the final draft of the law issued by the parliament, including requirements for critical datum infrastructure operators to store personal information and important business data in China, provide unspecified technical support to security bureaux, and pass national security reviews.
Those demands have raised fear within companies that dread they would have to hand over intellectual property or open back doors within products in order to operate in Chinas market.
James Zimmerman, the chairman of the American Chamber of Commerce in China, called the provisions vague, equivocal, and subject to broad interpreting by regulatory authorities.
Human Rights Watch told elements of the law, such as criminalising the use of the internet to injury national unity, would further limit online freedom.
Despite widespread international concern from corporations and rights advocates for more than a year, Chinese authorities pressed ahead with this restrictive law without stimulating meaningful changes, Sophie Richardson, China Director at Human Rights Watch, said in an emailed statement.
Zhao Zeliang, a director at the Cyberspace Administration of China, said every article in the law was in accordance with the rules of international trade and that China would not close the door on foreign companies.
They believe that[ phrases such as] secure and independent control, secure and reliable, that these are signs of trade protectionism. That “they il be” synonymous. This is a kind of misunderstanding, a kind of prejudice, Zhao told.
Many of the provisions had been previously applied in practice, but their formal codification coincides with Chinas adoption of a series of other regulations on national security and foreign civil society groups.
The laws adoption comes amid a broad crackdown by President Xi Jinping on civil society, including rights lawyers and the media, which critics say is meant to quash disagreement.
Last year, Beijing adopted a sweeping national security law that aimed to make all key network infrastructure and information systems secure and controllable.
Chinas government has come to recognise that cyberspace instantly and profoundly impacts on many if not all aspects of national security, told Rogier Creemers, a researcher in the law and governance of China at Leiden University in the Netherlands.
It is a national space, it is a space for military action, for important economic action, for criminal action and for espionage, he said.
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