“The Chinese government has adopted new regulations requiring companies that sell computer equipment to Chinese banks to turn over secret source code, submit to invasive audits and build so-called back doors into hardware and software, according to a copy of the rules obtained by foreign technology companies that do billions of dollars’ worth of business in China,” Paul Mozur reports for The New York Times.
“The new rules, laid out in a 22-page document approved at the end of last year, are the first in a series of policies expected to be unveiled in the coming months that Beijing says are intended to strengthen cybersecurity in critical Chinese industries,” Mozur reports. “As copies have spread in the past month, the regulations have heightened concern among foreign companies that the authorities are trying to force them out of one of the largest and fastest-growing markets.”
“In a letter sent Wednesday to a top-level Communist Party committee on cybersecurity, led by President Xi Jinping, foreign business groups objected to the new policies and complained that they amounted to protectionism,” Mozur reports. “The groups, which include the U.S. Chamber of Commerce, called for ‘urgent discussion and dialogue’ about what they said was a ‘growing trend’ toward policies that cite cybersecurity in requiring companies to use only technology products and services that are developed and controlled by Chinese companies.”
“While the Obama administration will almost certainly complain that the new rules are protectionist in nature, the Chinese will be able to make a case that they differ only in degree from Washington’s own requirements,” Mozur reports. “The United States has made it virtually impossible for Huawei, a major Chinese maker of computer servers and cellphones, to sell its products in the United States, arguing that its equipment could have ‘back doors’ for the Chinese government.”
Some of America’s largest tech companies could be hurt by the rules, including Apple, which is making a big push into the country. Apple has used new encryption methods in the iPhone 6 that are based on a complicated mathematical algorithm tied to a code unique to each phone. Apple says it has no access to the codes, but under the proposed antiterrorism law, it would be required to provide a key so that the Chinese government could decrypt data stored on iPhones.
Read more in the full article here.
MacDailyNews Take: How long can Cook et al. hold out on iOS encryption and with what will the powers that be, in the U.S. and elsewhere, threaten Apple in order to get what they want?
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