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US Commerce Secretary: Cybersecurity Concerns Can’t Trump Trade

While on a visit to China yesterday (April 14), U.S. Secretary of Commerce Penny Pritzker said cybersecurity measures must be addressed outside of trade regulation agreements, Reuters reported.

Her comments come following concerns regarding potential Chinese regulations that would limit trade between foreign technology companies, the report said, which includes drafting laws that include language about regulating banking technology. These concerns have been echoed by President Barack Obama and about the connection between cybersecurity concerns and the flow of trade. Recently, China has taken steps to indicate it would limit imports from foreign technology companies.

“I have heard from numerous American CEOs that they are either avoiding the Chinese market or planning to reduce their exposure here, because they fear that the rules favor indigenous companies or that their intellectual property is at risk, or they worry that regulations will change unfairly,” Pritzker said, according to Reuters. She called those fears a “lose-lose situation” for both sides.

Pritzker said it’s critical for the U.S. to address cybersecurity outside of dealing with global trade or investments abroad. She also stipulated that “China will never become a strong innovation economy without an intellectual property protection regime that is enforced broadly and consistently.” She told reporters Monday (April 13) that there is dialogue between U.S. and Chinese leaders on the matter.

Reuters also reported that 31 business associations combined from the U.S., Japan and Europe to share their concerns with Chinese leaders about the banking technology regulations that are being implemented, which suggested Beijing suspend the rules.

In early February, U.S. business groups also called upon China to postpone the implementation of new regulations that some are saying could be a “backdoor” for espionage and hacking by the Chinese government.

The new rules, according to the group that included the U.S. Chamber of Commerce, would force tech companies selling computer equipment to Chinese banks to set up research and development facilities in the country, require all workers servicing technology equipment to get work permits, and require the establishment of “ports” where Chinese officials can manage and monitor data processed by the hardware shipped into the country. There is also a provision where the source codes for the technology, which are a set of fiercely guarded commands that create programs within the software, must be turned over to government officials and regulators, a stipulation that has business groups concerned about possible privacy violations and espionage against American companies.

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