China de­lays parts of new cy­ber­se­cu­rity law af­ter protests.

Crit­ics say new law ham­pers mar­ket ac­cess

The Washington Times Daily - - FRONT PAGE - BY JOE MCDON­ALD

BEI­JING | China has post­poned en­force­ment of part of a cy­ber­se­cu­rity law that com­pa­nies warn vi­o­lates Bei­jing’s free-trade pledges, but of­fi­cials still in­sist that most of the law will take ef­fect Thurs­day as planned.

Com­mu­nist au­thor­i­ties say the mea­sures are needed to pre­vent crime and ter­ror­ism and to pro­tect pri­vacy. Com­pa­nies and for­eign gov­ern­ments com­plain the law will ham­per mar­ket ac­cess and is be­ing rushed into force be­fore Bei­jing has told com­pa­nies how to com­ply.

“This cer­tainly will be a huge im­pact,” said Michael Chang, a vice pres­i­dent of the Euro­pean Union Cham­ber of Com­merce in China. “The sit­u­a­tion is still a lot of un­cer­tainty and unclar­i­fied terms. We still see a lack of tan­gi­ble rules for busi­ness to fol­low.”

The lat­est ver­sion of mea­sures sent to com­pa­nies on reg­u­la­tion of cross-bor­der move­ment of data says they take ef­fect Thurs­day but en­force­ment is post­poned for 18 months to Dec. 31, 2018.

It gave no ex­pla­na­tion for the post­pone­ment. But it fol­lowed ap­peals by a coali­tion of dozens of global busi­ness groups for a de­lay un­til the rules could be made con­sis­tent with World Trade Or­ga­ni­za­tion reg­u­la­tions.

Other mea­sures in­clud­ing how to de­fine im­por­tant data and se­cu­rity stan­dards for com­puter equip­ment take ef­fect Thurs­day, ac­cord­ing to the Cy­berspace Ad­min­is­tra­tion of China, the agency re­spon­si­ble for en­forc­ing them.

The law will “pro­tect the broad masses of peo­ple and ef­fec­tively safe­guard na­tional cy­berspace sovereignty and se­cu­rity,” the agency said Wed­nes­day on its web­site.

A mea­sure on how to de­fine im­por­tant data takes ef­fect Thurs­day, five days af­ter it was re­leased Satur­day for a 30-day com­ment pe­riod.

Bei­jing has is­sued a se­ries of mea­sures over the past decade to tighten con­trol over data, min­i­mize re­liance on for­eign se­cu­rity tech­nol­ogy and pro­mote China’s fledg­ling providers. Busi­ness groups and China’s trad­ing part­ners com­plain that vi­o­lates its mar­ket-open­ing pledges.

Pres­i­dent Xi Jin­ping’s govern­ment has cast it­self as a pub­lic de­fender of global free trade in re­sponse to Pres­i­dent Trump’s prom­ises to limit im­ports. But busi­ness groups say Bei­jing ap­pears to be try­ing to squeeze for­eign com­peti­tors out of promis­ing fields in­clud­ing agri­cul­ture-re­lated biotech­nol­ogy, health prod­ucts and data se­cu­rity.

In a re­port Thurs­day, the Euro­pean Union Cham­ber said 30 per­cent of in­for­ma­tion tech­nol­ogy and tele­coms com­pa­nies that re­sponded to a sur­vey be­lieved they were dis­crim­i­nated against un­der na­tional se­cu­rity-re­lated leg­is­la­tion. The Amer­i­can Cham­ber of Com­merce in China said in April a sur­vey found only 10 per­cent of com­pa­nies in tech­nol­ogy-in­ten­sive in­dus­tries were op­ti­mistic about their reg­u­la­tory en­vi­ron­ment.

That has fu­eled trade strains with the United States and Europe at a time of ane­mic global eco­nomic growth.

China’s top eco­nomic of­fi­cial, Premier Li Ke­qiang, is due to meet Fri­day with Euro­pean Union lead­ers in Brus­sels for talks on po­lit­i­cal and eco­nomic re­la­tions amid mount­ing Euro­pean frus­tra­tion about Chi­nese mar­ket bar­ri­ers.

Chi­nese lead­ers have re­sisted the no­tion of a bor­der­less in­ter­net and free move­ment of in­for­ma­tion. Bei­jing blocks ac­cess to for­eign web­sites deemed sub­ver­sive and Mr. Xi has called on other gov­ern­ments to re­spect “cy­ber sovereignty,” or the right of coun­tries to re­strict on­line ac­tiv­ity.

The Cy­ber­se­cu­rity Law would re­quire com­puter equip­ment and se­cu­rity sys­tems to pass govern­ment tests. Com­pa­nies would be re­quired to store any data about Chi­nese cit­i­zens within the coun­try.

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