The Scary Chinese Cybersecurity Law That Could Devastate Foreign Businesses

frfweThere is currently a tremendous amount of western companies operating in China. If a business isn’t trying to take advantage of Chinese manufacturing, then it’s startups trying to squeeze their way into one of the hottest markets in the world.

Even if a business is primarily based in the US, it’s going to be in trouble by the middle of 2017 if it’s doing anything in China. No matter what some people might think, it doesn’t have anything to do with the new President of the United States.

Why Businesses Are In Trouble

The real reason businesses are in trouble boils down to a new cybersecurity law that came sweeping into play on the 7th November last year. It’s not going to be implemented until June 2017, but foreign businesses are already dreading the worst. It’s apparently to prevent malicious hackers from wreaking havoc on local servers, but if you look a little closer at a few of the details it seems odd.

Storing Information Inside China

If a company has gathered any important data or personal information inside the country it’s meant to stay there. Imran Ahmad, a Toronto cyber security lawyer has pointed out this only applies to businesses operating in critical areas, although they’ve certainly not been clearly defined. It’s likely to focus on industries like energy, transport, and finance. Unfortunately, at this stage nobody really knows.

We do know it’s going to cause a huge amount of problems for multinationals, because in order for enormous companies to operate smoothly the flow of business data across borders needs to be as seamless as possible. There are a couple of things they’re particularly concerned about. Will data stored in the country become vulnerable? Also, it’s going to mean they’ll need to invest more money into their Chinese offices.

The Need For Security Certifications

We’ve saved the best one for last because this could get really messy. Companies will need to start acquiring safety certifications for all their software and network equipment. Will they have to start handing over their security keys to anyone not connected to their business? Due to the fact this is happening in China, we all know the question everyone is afraid to ask.

Once anything has been handed over will we see proprietary technologies handed straight to Chinese-owned businesses? They are known for replicating a lot of things the west comes up with, and this new cybersecurity law will give them access to juicer stuff if foul play is involved. There is already talk that this will put foreign companies at a disadvantage compared to businesses like Alibaba and Huawei.

Nobody Knows What Will Happen

There are of course other problems we could see arising in the future, but Chinese officials think the new law is a step in the right direction. Obviously some businesses think differently and we’ll have to wait until everything is implemented before we find out for sure. It’s not going to stop any company outside China from targeting one of the largest markets in the world, but things could get complicated real quick.

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