China Halts Exclusionary Banking Tech Policy

China has apparently changed course from a policy that would have effectively locked foreign technology firms out of the nation’s banking sector.

For the time being, anyway.

A letter sent Monday (April 13) calls for banks to “suspend implementation” of the rules. Put into effect at the end of 2014, those rules require foreign firms that sell computer equipment to Chinese banks to turn over intellectual property and submit source code, in addition to other demands.

Unshockingly, that was a major non-starter for many firms and has set the stage for a trade dispute between the U.S. (the nation most affected by the rules) and China.

This suspension is a temporary measure while Chinese authorities revise the rules – though it still remains uncertain what exactly a revised version will contain. Assuming it avoids the more ridiculous provisions like the disclosure of source code, even defanged it will likely seem problematic to multinational tech companies.

The frame for this debate is a large question of national security – for both nations. The U.S. has accused China of hacking it remotely – the Chinese accuse Americans of hiding intelligence gathering technology in the other tech that comes overseas.