Even as Chinese companies like Huawei are being targeted by the US government over security concerns, Beijing has responded in kind by applying pressure on American companies like Oracle and Morgan Stanley.
The escalation of tensions over cybersecurity concerns has cast a huge shadow over the sector as foreign businesses fear they might be forced to hand over intellectual property or reveal business-critical data to Chinese regulators.
Here is an excerpt from a report published in the Financial Times:
Beijing is set to implement a strengthened regime of cyber rules under its existing “multilevel protection scheme” (MLPS) in December, according to documents seen by the Financial Times that are yet to be publicly announced. The rules are aimed at fortifying “national information security”, even as US-China commercial tensions flare.
But it has emerged that foreign companies are already being scrutinized for possible cyber security violations. Kent Kedl, partner at Control Risks, a global risk management firm, said at least two foreign companies that deal with consumer data in China had been under official investigation for several months.
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Cyber security tension has fed into the Sino-US trade war, prompting some multinationals to re-evaluate their commitment to China. Oracle, the US software giant, said this month it was firing 900 staff from its China team, making up 60 per cent of its research and development effort there.
When China’s Cyber Security Law took effect in June 2017, it addressed all aspects of cyber security from network systems and facilities to data localization and the protection of critical information infrastructure. Analysts and foreign companies have criticized it as extremely vague and exceptionally wide in scope.
The latest strengthening of the MLPS regime — which reinforces the cyber security law — is set to expand supervision over technologies including mobile internet, the internet of things, cloud computing, big data and industrial security systems, according to official documents. They indicate that in future, every link in the life cycle of a piece of equipment’s development will be supervised, checked and evaluated.
