China defends surveillance laws for foreign firms | Business| Economy and finance news from a German perspective | DW | 04.03.2015
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China defends surveillance laws for foreign firms

China has played down US concerns that new anti-terror legislation will give the government powers to police communications within its companies. New laws require foreign firms to provide backdoors in their software.

Four US Cabinet members, including Secretary of State John Kerry, wrote their Chinese counterparts to express "serious concerns" about the draft anti-terror law and rules for technology procurement at Chinese banks, a US official said on condition of anonymity.

China responded via Foreign Ministry spokeswoman Hua Chunying, who said the law is necessary to fight terrorism, and that China hopes "the United States will regard this in a calm and objective way."

Fu Ying, China's parliamentary spokeswoman, on Wednesday made assurances that the legislation will not affect the interests of technology firms.

China's proposals, which would require tech firms to provide encryption keys and install backdoors granting law enforcement access for counterterrorism investigations, drew criticism from Obama, who told Reuters news agency that China would have to change the draft law if it were "to do business with the United States."

'All kinds of hypocrisy'

But China's response shows that the US has lost its moral high-ground on the issue following the Edward Snowden revelations of widespread US government surveillance and the collusion of major telecom firms. "We just did what the Americans have already done," said Shen Dingli, director of Fudan University's Center for American Studies. "You could choose to leave, leaving the opportunity of making money from 1.3 billion people. We have substitutes."

Ted Moran, professor of international business and finance at Georgetown University, told AP that US laws require foreign companies of providing similar "backdoors," and not only that, they give the US government the reach to pursue user data stored in other countries.

"There's all kinds of hypocrisy going on here," Moran said.

He said there is more congressional oversight enshrined in US law, but its effectiveness is a matter of debate. The Communications Assistance for Law Enforcement Act, for example, requires telecom carriers to allow law enforcement agencies to conduct electronic surveillance pursuant to a court order, he said.

The US Patriot Act, meanwhile, allows surveillance orders to be issued by a special, secret court, he said.

Keeping an eye on banks

China's anti-terror law comes on the heels of new regulations that require Chinese banks to have 75 percent of their IT infrastructure certified as "secure and controllable" by the Chinese government by 2019.

While those rules are expected to take effect March 15, details of what companies would have to do to comply with the vetting process are not yet clear. People familiar with the regulations say companies would have to use local encryption algorithms, undergo intrusive security audits, and disclose source code and other proprietary information to the Chinese government. It remains to be seen whether Western companies would be willing to take such steps.

US government officials have said that the new rules are about protectionism to favor Chinese companies. "The administration is aggressively working to have China walk back from these troubling regulations," US Trade Representative Michael Froman said in a statement last week.

bk/hg (AP, dpa, Reuters)

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