U.S. President Barack Obama came down hard on China’s new rules on U.S. technology giants in an interview with Reuters on Monday. Obama indicated he had taken up the issue with his Chinese counterpart, President Xi Jinping, and hinted U.S. companies may stop their voluminous trade with China if the policies were not reversed soon.
China’s new technology laws, ostensibly aimed at counterterrorism operations, demands that technology firms provide highly sensitive data to the Chinese authorities. This data includes encryption keys and passwords and entry codes used for data protection. The law also requires tech companies to design technological ‘backdoors’ for the Chinese authorities to keep an eye on their activity. Such high level of intrusion into data that affects not just the company but also potentially its global user base is being strongly opposed by a united front of American legislators and technology giants eager to capitalize on the growing affluent population base in China.
Cyber security has already become a topic of contention between the United States and the People’s Republic, and these measures are feared to sour the relationship even further. Chinese authorities claimed the seemingly excessive measures are not extraneous but essential for national security and for the protection of business dynamics in one of the world’s fastest growing and largest economies.
The second law of the contentious bill was read in the Chinese Parliament last month and the country is expected to incorporate the law in the coming few months, possibly even weeks. This would leave U.S. tech companies with a dilemma of either pulling out of one of the world’s largest technology markets or handing over vital business secrets to a system already viewed with considerable suspicion. President Obama warned China that major companies would overwhelmingly take the first option, hurting the Chinese economy.