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China, with this new regulation, shows its supports of Trump's attack on China. Long live China and Make America Great.
https://www.wsj.com/articles/china-...t-11588003275?mod=djemCybersecruityPro&tpl=cy
China adopted tough new cybersecurity rules for buyers of technology equipment, which could place foreign tech products at a disadvantage in the Chinese market.
The new procurement rules, announced Monday by the Cyberspace Administration of China and set to take effect June 1, require operators of “critical information infrastructure” to go through a cybersecurity review process when ordering goods and services that may affect national security. They had been among draft regulations that Beijing released mid-2019 as U.S.-China trade talks came to a halt.
The CAC didn’t say what the status was for other draft regulations released around the same time, including changes that would restrict the outflow of personal data from China.
Among the draft regulations, in an effort to flesh out an existing cybersecurity law, the purchasing rules had been of special concern to American businesses already worried about barriers in China. In a statement about the final version posted online, the CAC said the rules weren’t intended to restrict or discriminate against foreign companies. “Our policy of welcoming overseas products and services into China’s market has not changed,” it said.
Under the new rules, before signing a contract, companies must submit procurement documents, purchase agreements and an analysis of the deal’s potential national-security impact for government review. The procedure normally will wind up within 45 working days but may take three months or more in complicated cases, said the CAC, which will lead the interagency scrutiny. The Ministry of Public Security is among the other agencies involved.
The CAC offered no new details on which companies would be affected. China has broadly included businesses with computer-network operations in telecommunications, energy, transportation, information services and finance in the classification of operators of critical infrastructure.
Worrisome for American businesses is wording—retained from the draft published last year—that companies must assess risks of supply-chain disruption due to “politics, diplomacy and trade.” The wording was seen as a direct response to the U.S. move last year to add Huawei Technologies Co. and several other Chinese tech firms to its trade blacklist that effectively banned suppliers from selling parts and technologies with a U.S. origin to those firms.
Many firms “worry this provision might be used as justification to exclude U.S. companies from longstanding partnerships and supply lines,” said Jacob Parker, a Washington, D.C.-based senior vice president at the U.S.-China Business Council. The final version of the rules, however, does offer more clarity on some aspects such as cybersecurity review timelines, he said.
The prospect of potentially lengthy reviews may prompt Chinese companies to stay away from foreign products and services, said Yan Luo, a Beijing-based attorney focused on cybersecurity policies at Covington & Burling LLP.
Lance Noble, a Beijing-based analyst at research firm Gavekal Dragonomics, said while China has legitimate security concerns, the use of vague language in the measure is problematic.
“The inclusion of flexible language on which risks are to be guarded against, as well as the pre-existing aim to reduce reliance on foreign technology, will lead [multinational corporations] to worry that this will further complicate their position in the Chinese market,” he said, referring to multinational corporations.
The CAC didn’t immediately respond to requests for further comment.
—Yoko Kubota contributed to this article.
https://www.wsj.com/articles/china-...t-11588003275?mod=djemCybersecruityPro&tpl=cy
China adopted tough new cybersecurity rules for buyers of technology equipment, which could place foreign tech products at a disadvantage in the Chinese market.
The new procurement rules, announced Monday by the Cyberspace Administration of China and set to take effect June 1, require operators of “critical information infrastructure” to go through a cybersecurity review process when ordering goods and services that may affect national security. They had been among draft regulations that Beijing released mid-2019 as U.S.-China trade talks came to a halt.
The CAC didn’t say what the status was for other draft regulations released around the same time, including changes that would restrict the outflow of personal data from China.
Among the draft regulations, in an effort to flesh out an existing cybersecurity law, the purchasing rules had been of special concern to American businesses already worried about barriers in China. In a statement about the final version posted online, the CAC said the rules weren’t intended to restrict or discriminate against foreign companies. “Our policy of welcoming overseas products and services into China’s market has not changed,” it said.
Under the new rules, before signing a contract, companies must submit procurement documents, purchase agreements and an analysis of the deal’s potential national-security impact for government review. The procedure normally will wind up within 45 working days but may take three months or more in complicated cases, said the CAC, which will lead the interagency scrutiny. The Ministry of Public Security is among the other agencies involved.
The CAC offered no new details on which companies would be affected. China has broadly included businesses with computer-network operations in telecommunications, energy, transportation, information services and finance in the classification of operators of critical infrastructure.
Worrisome for American businesses is wording—retained from the draft published last year—that companies must assess risks of supply-chain disruption due to “politics, diplomacy and trade.” The wording was seen as a direct response to the U.S. move last year to add Huawei Technologies Co. and several other Chinese tech firms to its trade blacklist that effectively banned suppliers from selling parts and technologies with a U.S. origin to those firms.
Many firms “worry this provision might be used as justification to exclude U.S. companies from longstanding partnerships and supply lines,” said Jacob Parker, a Washington, D.C.-based senior vice president at the U.S.-China Business Council. The final version of the rules, however, does offer more clarity on some aspects such as cybersecurity review timelines, he said.
The prospect of potentially lengthy reviews may prompt Chinese companies to stay away from foreign products and services, said Yan Luo, a Beijing-based attorney focused on cybersecurity policies at Covington & Burling LLP.
Lance Noble, a Beijing-based analyst at research firm Gavekal Dragonomics, said while China has legitimate security concerns, the use of vague language in the measure is problematic.
“The inclusion of flexible language on which risks are to be guarded against, as well as the pre-existing aim to reduce reliance on foreign technology, will lead [multinational corporations] to worry that this will further complicate their position in the Chinese market,” he said, referring to multinational corporations.
The CAC didn’t immediately respond to requests for further comment.
—Yoko Kubota contributed to this article.
