China’s Internet Controls Will Get Stricter, to Dismay of Foreign Business
China’s Internet Controls Will Get Stricter, to Dismay of
Foreign Business
By PAUL MOZUR NOV. 7, 2016
HONG KONG — In August, business groups around the world
petitioned China to rethink a proposed cybersecurity law that they said would
hurt foreign companies and further separate the country from the internet.
On Monday, China passed that law — a sign that when it
comes to the internet, China will go its own way.
The new rules, which were approved by the country’s
rubber-stamp Parliament and will go into effect next summer, are part of a
broader effort to better define how the internet is managed inside China’s
borders.
Officials say the rules will help stop cyberattacks and
help prevent acts of terrorism, while critics say they will further erode
internet freedom. Business groups worry that parts of the law — such as
required security checks on companies in industries like finance and
communications, and mandatory in-country data storage — will make foreign
operations more expensive or lock them out altogether. Individual users will
have to register their real names to use messaging services in China.
Restrictions on the flow of data across borders “provide
no security benefits but will create barriers to Chinese as well as foreign
companies operating in industries where data needs to be shared
internationally,” James Zimmerman, chairman of the American Chamber of Commerce
in China, wrote in an emailed statement.
He added that by creating such restrictions, China risked
isolating itself technologically from the rest of the world.
But in many ways, the regulations are not likely to have
a major impact on much about how business is done. Most of the rules are
already in effect, but not codified. Other parts are vague enough that the
government will determine their meaning on the fly.
The law, however, is an important statement from Beijing
on how the internet should be run: with tighter controls over companies and
better tracking of individual citizens.
Calling it a “basic law,” Chen Jihong, a partner at the
Zhong Lun law firm in Beijing, said the rules were set up to deal with the
growing number of legal issues regarding the Chinese internet and to seek to
strike a balance between privacy and security.
“The law only stipulates principles; it would take
follow-up laws or interpretations to specify the standards,” he said.
Human Rights Watch said on Monday that it was concerned
about several aspects of the law, including that it calls for real-name
registration for users of Chinese instant messaging services.
“The already heavily censored internet in China needs
more freedom, not less,” the group’s China director, Sophie Richardson, wrote
in a statement. “Despite widespread international concern from corporations and
rights advocates for more than a year, Chinese authorities pressed ahead with
this restrictive law without making meaningful changes.”
The final law did soften a few elements. In particular, a
second draft of the law said foreign businesses did not need to keep all of
their data inside China — just important business data collected within China
or about Chinese consumers.
For years the government has been working to ensure that
people’s real names are linked to their online activities. Beijing has also
long restricted many types of online content, from pornography to political
discussion.
Foreign companies have at times dealt with the controls
detailed in the new law. For example, during the past two years, American tech
companies have had products subjected to government security reviews that
target encryption and data storage. Beijing also distributed a pledge to
American companies last year asking them to vow to respect Chinese national
security and to store data within the country.
The law is also part of a broader set of policy steps to
streamline regulation of the internet. Analysts say the regulations seem to
indicate that the Cyberspace Administration of China, a relatively new
regulatory body created during President Xi Jinping’s tenure, ultimately is in
charge of setting the agenda.
Last year China passed a national security law that
called for technology that supports crucial sectors of the economy and
government to be “secure and controllable.” Industry groups say that language
means companies can be forced to allow third-party access to their networks,
provide encryption keys or hand over source code.
After the state news media announced the law’s passage,
comments on Chinese news and social media sites were largely censored.
On one news app run by the internet company Tencent, some
users applauded the law as a way for China to crack down on internet fraudsters
and the less savory parts of the web. Others wondered what the cost of that
security would be.
“I hope this won’t be a law that does more to limit
freedom of speech,” wrote one user under the screen name Leisa Wenzhou.
Cao Li contributed research from Beijing.
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