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China’s New Security Rules Concern Foreign Companies

China is gearing up to enforce its new cybersecurity law, but foreign companies don’t know much about it, which is causing headaches.

According to a report in The New York Times, the law, which was approved in 2016 and takes effect today (June 1), is aimed at helping Beijing control the internet within the borders of the country. Officials in China have said the rules will help protect against cyberattacks and terrorism, but concerns abound, particularly from businesses.

For starters, the paper reported, companies are worried that the new law will make their Chinese businesses less secure and that it will be more expensive to operate in the country. What’s more, some businesses say the new rules could preclude them from conducting business in the country altogether.

The law will have a big impact on how business is done in China, Michael Chang, an executive with the Finnish technology company Nokia and the vice president of the European Union Chamber of Commerce in China told the New York Times the law will have a huge impact on how companies conduct business in China and said there is a lot of confusion from business owners.

“Industry is not ready because the implementation rules are not clear,” Chang said during a subsequent presentation. “We still have a lot of unclarified territory that needs to be addressed as soon as possible.” Company executives are also taking issue with the wording of the rules, arguing it is ambiguous and could give the China Community Party a way to target the foreign companies.

Under the new rules, companies would have to keep their data within the country and would face security checks if they operate in industries, including finance and communications. Individual users have to register their real names in order to be able to use messaging services, noted the report.

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