The Obama Administration has voiced its unease with China’s development of the new cyber antiterrorism regulations. As I explained in my previous blog post, China claims that their updated policy on foreign technology companies will protect national security – especially in light of the recent actions revelations of a certain Mr. Edward Snowden. [The Prof: the actions were by the NSA and their ilk!]
In an interview with Reuters, President Obama openly criticized China’s strategy. “We have made it very clear to them that this is something they are going to have to change if they are to do business with the United States,” President Obama told Reuters. Officials and lobbyists in Washington also believe the new regulations are unfairly targeting Western companies.
Last week, second draft of the legislation was read over by a parliamentary body, and it plans to ratify the law within the next few months. If China follows through with its plans, then it will only raise the feelings of mistrust between the two economic giants.
Source: http://www.reuters.com/article/2015/03/02/us-usa-obama-china-idUSKBN0LY2H520150302
How do these laws restrict western companies in China? For instance, I could see companies like Amazon and Google being heavily restricted in their ability to grow if internet restrictions are imposed.
Blake,
Many western companies, especially Google, feel like they are being targeted by the Chinese tech laws. In late 2014, China cut off the use of Google’s email service via third-party applications. The regular GMail site and other Google pages had been consistently blocked since late 2014. Many expect these laws to impose on future technology growth and investment.
You can read more here:
http://bits.blogs.nytimes.com/2015/02/13/chinas-internet-restrictions-are-hampering-business-foreign-companies-say/?_r=0
If you look at blog posts in past terms, you’ll see that Google botched its entry into China all on its own. True, domestic Chinese firms know how to play the lobbying game to nudge rules in a favorable direction, but it’s already late in the day for a new entrant.
Ditto online retail. In China it’s cell phones and not computers that are central, and Amazon is not oriented to that. Futhermore, Amazon has not really figured out how to be profitable even in the US. Alibaba has made money from day one, and is bigger than Amazon on every dimension, including market capitalization ($210 billion [BABA] vs $180 billion [AMZN] as of today).