China to launch controversial cyber law

Global firms are against it but China has announced it will implement a new cyber security law

China to launch controversial cyber law

Insurance News

By Jordan Lynn

China will implement a new, controversial cyber security law despite concerns from international businesses.

The new law, which was passed in November and will be implemented from Thursday, aims to protect Chinese networks and user information but has been criticised for favouring Chinese businesses and leaving foreign firms open to corporate espionage.

Last year, 46 business groups from around the world urged Beijing to change the proposed plans, saying that the law would weaken security and separate China from the global digital economy.
“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,” Carly Ramsey, associate director at Control Risks, a risk-management consultancy, told The Financial Times.

The new law requires companies to introduce data protection measures while data on Chinese citizens must be held on Chinese servers.

Critical companies, such as insurers and banks, will have to store all data collected in China within the country and must go through a national security review which allows Beijing to request computer program source code and could also allow access to the intellectual property of companies based in the country.

Foreign firms in China will face the biggest challenges as they utilise global cloud services to store data.

Zhao Zeliang, director of the cybersecurity bureau, was reported to have brought together 200 representatives from foreign and domestic businesses two weeks ago to discuss the legislation, Yahoo reports.

At this meeting, Zhao reportedly offered assurances that the regulator would remove some of the language that had led to strong objections.

Related stories:
China and Australia join forces against cyber threats
Global business groups protest China’s proposed cyber law

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