China will protect foreign companies' lawful rights, the foreign ministry said on Friday, in response to media reports that US business lobbies have asked the US government for help over new Chinese cyber security regulations expected to come into force in 2015.
The US Chamber of Commerce and 16 other US business lobbies said the new rules would hurt US firms' overseas market opportunities and jobs in the US, according to a Reuters report Thursday.
"The Chinese government will protect the legitimate interests of foreign companies in accordance with the law," Chinese foreign ministry spokesperson Hong Lei told a daily press briefing on Friday.
Experts said the lobbies' move is not surprising and both China's sovereignty and foreign firms' lawful interests should be protected when it comes to cyber security.
In a letter sent to US officials including Secretary of State John Kerry on Wednesday, the lobbies said new Chinese policies will impact the information and communications technology (ICT) sector, by forcing technology vendors to Chinese banks to hand over secret source code and adopt Chinese encryption algorithms, Reuters reported.
Reuters also reported that some US tech groups had written to the Chinese administration about the same policies on January 28.
In May 2014, the Cyberspace Administration of China said that China had decided to launch a security review targeting information technology (IT) products, services and suppliers preparing to enter the country's market.
The new rule could affect US companies including Cisco Systems Inc, International Business Machines Corp, Intel Corp and Hewlett-Packard Co.
Qin An, director of the China Institute of Cyberspace Strategy, said that as the US government has treated the cyberspace as the new battlefield of future warfare, China has every right to make sure its key sectors are protected from cyber risks.
"However, the US government does not have too many cards up its sleeves should it decides to answer the lobbies' call to intervene, on the record of its own purge of Chinese IT companies plus its embargo of advanced IT technologies to China," Qin told the Global Times Friday.
Fang Xingdong, founder of think tank chinalabs.com, said the security of IT infrastructure, such as source code, is the prerequisite of cyber security.
The "handing over" of source codes is a common mechanism around the world to ensure that sovereign countries have control over ICT systems in times of need, Fang said.
"However, the execution of the mechanism should ensure the interests of the involved companies are well-protected as the source code is their core assets," Fang told the Global Times.
Because of the existence of a technological gap, the international practice is to ask the vendor to pledge that the products and services it provided have no traps such as backdoors, and if violations are found later on, vendors will face hefty fines, Qin said.
Fang noted that domestic ICT vendors must also hand over their source codes to the government.
"If some US firms are kicked out of China when they are found to have violated China's cyber security regulations, then domestic firms could face an opportunity to fill the market vacuum," Fang said.
The lobby groups, out of the needs to defend their members' profits, could also be pushing the US government to adjust some of its policies, Qin said, noting that some of the foreign companies generate half of their revenue from China.
By 2020, revenue from the IT market and telecommunication services will both reach $300 billion in China, according to a report by market intelligence firm IDC in November 2014.
The China Banking Regulatory Commission ordered banks and finance agencies to boost the safety of their computer systems by 2019 in September last year.
Currently, about 80 percent of banks' core servers and systems are made by foreign brands, and most of China's financial IT systems are from foreign countries, media reported.
The US Chamber of Commerce and 16 other US business lobbies said the new rules would hurt US firms' overseas market opportunities and jobs in the US, according to a Reuters report Thursday.
"The Chinese government will protect the legitimate interests of foreign companies in accordance with the law," Chinese foreign ministry spokesperson Hong Lei told a daily press briefing on Friday.
Experts said the lobbies' move is not surprising and both China's sovereignty and foreign firms' lawful interests should be protected when it comes to cyber security.
In a letter sent to US officials including Secretary of State John Kerry on Wednesday, the lobbies said new Chinese policies will impact the information and communications technology (ICT) sector, by forcing technology vendors to Chinese banks to hand over secret source code and adopt Chinese encryption algorithms, Reuters reported.
Reuters also reported that some US tech groups had written to the Chinese administration about the same policies on January 28.
In May 2014, the Cyberspace Administration of China said that China had decided to launch a security review targeting information technology (IT) products, services and suppliers preparing to enter the country's market.
The new rule could affect US companies including Cisco Systems Inc, International Business Machines Corp, Intel Corp and Hewlett-Packard Co.
Qin An, director of the China Institute of Cyberspace Strategy, said that as the US government has treated the cyberspace as the new battlefield of future warfare, China has every right to make sure its key sectors are protected from cyber risks.
"However, the US government does not have too many cards up its sleeves should it decides to answer the lobbies' call to intervene, on the record of its own purge of Chinese IT companies plus its embargo of advanced IT technologies to China," Qin told the Global Times Friday.
Fang Xingdong, founder of think tank chinalabs.com, said the security of IT infrastructure, such as source code, is the prerequisite of cyber security.
The "handing over" of source codes is a common mechanism around the world to ensure that sovereign countries have control over ICT systems in times of need, Fang said.
"However, the execution of the mechanism should ensure the interests of the involved companies are well-protected as the source code is their core assets," Fang told the Global Times.
Because of the existence of a technological gap, the international practice is to ask the vendor to pledge that the products and services it provided have no traps such as backdoors, and if violations are found later on, vendors will face hefty fines, Qin said.
Fang noted that domestic ICT vendors must also hand over their source codes to the government.
"If some US firms are kicked out of China when they are found to have violated China's cyber security regulations, then domestic firms could face an opportunity to fill the market vacuum," Fang said.
The lobby groups, out of the needs to defend their members' profits, could also be pushing the US government to adjust some of its policies, Qin said, noting that some of the foreign companies generate half of their revenue from China.
By 2020, revenue from the IT market and telecommunication services will both reach $300 billion in China, according to a report by market intelligence firm IDC in November 2014.
The China Banking Regulatory Commission ordered banks and finance agencies to boost the safety of their computer systems by 2019 in September last year.
Currently, about 80 percent of banks' core servers and systems are made by foreign brands, and most of China's financial IT systems are from foreign countries, media reported.
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