Companies dealing with China or operating in China could be at risk for data theft thanks to China’s new counterterrorism law. It enables the government to access the company’s user accounts. This opens the accounts up to the risk of being hacked, risking data breaches about information and the loss of trade secrets.
Before passing the law, foreign companies were required to store data in China. Companies like Microsoft and Apple avoided doing this, afraid that their information could be stolen. The wording of the law is vague, requiring companies to “provide technical support and assistance” to the government. Companies argue that allowing the government to access sensitive files could open up cybersecurity problems.
Commenting on the law, a Chinese official claimed that the laws would not affect companies and their business operations, and that the law was not an excuse to create back doors into the companies.
President Obama remarked on the law, saying that an earlier draft could have jeopardized China’s business relationship with the United States. He thought it would hurt the Chinese economy in the long run. The draft demanded access to encryption keys.
Other regulations in China have given unbalanced advantages to local businesses over U.S. based companies. But since China is such a large economic superpower, companies feel pressured to do business with them.
China has been criticized by many groups over the counterterrorism law. It is said that the wording is too broad and may not only apply to terrorism, but any kind of group that the government feels is insubordinate. According to the law, anything is terrorism if it “generates social panic, undermines public security, infringes on personal and property rights, and menaces government organs.”
Another bad thing resulting from the law is that it limits the ability of social media and other news reporters to report on terrorism. This could reduce the accountability of the government and increase the likeliness they could silence bloggers and other outlets. Their limit on the internet community can make it more difficult for social media to gain access to it.
This law can mean a huge change in the way China does business and relates to its citizens, and not entirely in a good way.