Tech Battle 2015: China’s Cyber-Security Plan Draws Presidential Ire

by Matt Klassen on March 11, 2015

In late 2014 China drafted new legislation regarding the technology deployed in key government and financial sectors, part of an ongoing push to bolster the country’s own technological development and reduce its dependence on American technology to build its infrastructure. As part of the impending legislation new onerous restrictions will be placed on foreign companies who wish to continue to operate within China over the next few years, as the regime will force those companies to share their core technologies with China or allow the country’s security inspectors unfettered access to their products or services.

At the time the proposed legislation seemed to be simply the latest quid pro quo in an ongoing trade dispute between the two nations, one that has included witch hunts on foreign corporations, the tit-for-tat imposition of onerous restrictions on foreign companies, and, of course, accusations regarding corporate espionage and illegal government surveillance—in other words, a typical day in China-US relations.

So to add even more fuel to this evolving trade dispute, earlier this month President Obama went public with a scathing criticism of China’s proposed plans to impose new rules on American companies, saying that if China wants to keep doing business with America, well it better start playing nice…which in this case is akin to “do what we say, not what we do.”

The laws “would essentially force all foreign companies, including U.S. companies, to turn over to the Chinese government mechanisms where they can snoop and keep track of all the users of those services,” Obama said.

“As you might imagine tech companies are not going to be willing to do that,” he said.

As a Reuters report explains, “Obama said he was concerned about Beijing’s plans for a far-reaching counterterrorism law that would require technology firms to hand over encryption keys, the passcodes that help protect data, and install security “backdoors” in their systems to give Chinese authorities surveillance access.”

Simply put, China is asking for complete access to source codes and all encryption protocols so the regime can monitor networks for potential cyber-threats. The Chinese government sees these rules as vital to protect both state and corporate secrets.

While America’s reaction to these onerous requirements seems warranted, the ironic thing, of course, is that China’s new rules are designed to prevent the sort of cyber-intrusions American has seemingly been conducting on China’s own tech companies for years now, meaning the US really has no one to blame but itself for China adding a few more layers to its vaunted Great Firewall.

To briefly reiterate, over the last few years we’ve seen American target Chinese multinational tech companies ZTE and Huawei as apparent threats to national security, charged as fronts for the Chinese government, we’ve seen the American government encourage US companies to employ ‘safe’ American technology, we’ve discovered that the NSA had been using these very same Chinese tech companies to spy on China, and to top it all off, the dominance of American companies in China is hampering that country’s efforts to develop its own tech market…and America now has the gall to rattle its sabre and demand fair play.

In the end I fear an all out technology trade war is practically inevitable between China and the US, particularly if neither are willing to deviate from their present course, and it’s a fight that will hurt both countries deeply. The only problem for America, of course, is that in my view it started this mess and has little right to complain how China is responding to it now.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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