China’s Surveillance Rules Could Hurt its Tech Exports

Published on Author Christian von Hassell

Whereas the US has proven relatively discrete about its relationships with American tech firms, China is more than forthright about wanting to access companies’ data. The central government is currently weighing a draft law that would require both domestic and international tech firms with operations in China to provide a wealth of access to authorities. Among other items, the law would require companies to install backdoors in their products, provide encryption codes to the government, and store Chinese user data in servers on mainland China.

US companies in a range of industries already devote a great deal of resources playing defense against Chinese hackers. This new law, many say, would effectively open the floodgates of US firms trade secrets. Not only would this lead some American firms to consider pulling out of China, it also could discourage global demand for China’s own tech companies’ products.

4 Responses to China’s Surveillance Rules Could Hurt its Tech Exports

  1. I find that interesting about the exposure of American firms’ trade secrets. It certainly seems that US firms would consider pulling out of China if their trade secrets are to be exposed, or at the very least to seek patents for their products rather than classifying them as trade secrets.

  2. It would be interesting to see what kind of reciprocation we have with China in terms of patent enforcement. Surely, copyrights and trademarks do not hold up to well over there – i.e. Alibaba’s recent missteps – but whether patent enforcement is any different marks an interesting question, Moody.

  3. It seems this overreaching draft law is a knee-jerk reaction to NSA and US policies that have been equally overreaching in China’s tech space. The US government has been accused multiple times (Snowden’s disclosures and Mandiant both come to mind) of the wiretapping, monitoring, and cyber-theft of Chinese internet and telecom companies. But the Chinese have also been caught hacking US companies, so there is a lot of hypocrisy in play. Interesting to see how legitimate the law will be or if it remains a statement against current US policies in China.

  4. There’s an aphorism somewhere, the chimney sweep calling the coal hauler black?

    See a comment on a previous post on high tech competition casting this as a game designed to break monopolies. That’s not necessarily bad for the US, or at least US consumers.

    But as to infringement, the US can and does stop products from entering the US that have been found in violation of patent and copyright laws, including cell phones from Korean firms and all sorts of Disney paraphernalia that are legal everywhere in the world except in the US (as the Sonny Bono “Mickey Mouse” Copyright Act includes clauses that protect that icon, whereas Disney’s copyright expired years ago in all other countries).