China’s Cyber Security Law Rattles Multinationals:

Financial Times | 31 May 2017:

Businesses warn rules will increase costs and leave them more vulnerable to spying.

China’s first cyber security law will increase costs for multinationals, leave them vulnerable to industrial espionage and give Chinese companies an unfair advantage, business representatives and analysts have warned.

Aspects of the measure, which comes into force on Thursday, have been widely welcomed as a milestone in introducing much needed data privacy. But analysts have expressed fears it could help Beijing steal trade secrets or intellectual property from foreign companies.

“The law is both extremely vague and exceptionally wide in scope, potentially putting companies at risk of regulatory enforcement that is not related to cyber security,” said Carly Ramsey, associate director at Control Risks, a risk-management consultancy.

Foreign companies had petitioned Beijing to delay the legislation. “It is vitally important that [these measures are] proportionate, consistent, non-discriminatory and formulated in a transparent manner. Regretfully, this is not yet the case,” said Michael Chang, vice-president of the European Chamber of Commerce in Beijing.

The law is part of a drive by Beijing to shield Chinese data from the eyes of foreign governments after US whistleblower Edward Snowden revealed that the US was spying on communications from multinationals, say analysts.

“The message is clear that the government will encourage more domestic development of technology, and that it now sees privacy and cyber security as vital national concerns,” said Xun Yang, a lawyer at Simmons & Simmons in Shanghai.

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