Post-Snowden, China's cold war against foreign tech goes on

The NSA activity revelations have given China a good reason to block US and other foreign technology

As if things couldn’t get any worse for foreign technology firms selling in to China, Beijing looks set to introduce strict new rules for the insurance industry which could force firms to use only domestic hardware and software products. Although the reason given for this new initiative is to improve cybersecurity, it can more properly be seen as part of ongoing efforts to de-Americanise the country’s IT infrastructure. Unfortunately for US tech, thanks to the activities of the NSA and whistle-blower Edward Snowden, China now has the perfect excuse to do so.

 

Cybersecurity insurance

The China Insurance Regulatory Commission (CIRC) announced the draft rules last year but the issue has come to a head after the body filed a “technical barriers to trade” (TBT) notification with the World Trade Organization which suggests they will be approved within 60 days. As they stand, the rules will require all insurance companies with a business presence inside China to prioritise the purchase of "secure and controllable" technology. This euphemism, although so far not interpreted by Beijing, is likely to mean home-grown products. Those wanting to use foreign-made tech are likely to be forced to open up source code and/or include Chinese components, according to reports.

A second part of the proposed regulations could make it even tougher for foreign insurers to operate in China. It will require them to store all data on Chinese cases inside the country, and could introduce restrictions on sending any data abroad and/or to third party providers. Currently, foreign insurers comprise less than five per cent of the Chinese market.

Sensing danger, a group of over 20 foreign lobby groups including the American Chamber of Commerce in China, the Canada-China Business Council, the Japan Chamber of Commerce and Industry in China, and Digital Europe have sent a letter of complaint to the CIRC chairman, according to the Wall Street Journal. “China, like other [WTO] members, has the right to implement measures necessary for the maintenance of cybersecurity, but we believe that the provisions go far beyond what is necessary,” it apparently reads.

 

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