china-internetRemember how upset some people got when they learnt that the bodies representing the US government had allegedly required companies to include backdoors to their hardware and software for security purposes? Well prepare to get upset again because it seems that over in China, a new law that was approved at the end of last year is basically asking for those same provisions, but we suppose at least with China they are pretty open about it.

According to a report from The New York Times, companies in China who are involved with Chinese banks and are selling computer equipment to them are now required to turn over their secret source code, submit themselves to invasive audits, and as a building backdoors to their hardware and software. This is based on a copy of the rules that were obtained by foreign tech companies operating in the country.

The goal, according to the Chinese government, is to help strengthen cybersecurity in critical Chinese industries, so we guess banks do make sense. Unfortunately this is not sitting well with companies as it basically compromises their intellectual property – imagine if the codes for a piece of proprietary software is leaked, what edge does the company have now?

Some have speculated that this move is to help give local business an edge. According to Matthew Cheung, a researcher at Gartner, “I think they’re obviously targeting foreign vendors that are operating in China. They are promoting the local technologies so that local providers who have the capabilities to provide systems to these enterprises can get more market share.”

To that extent, foreign business groups have put together a letter sent to the top-level Communist Party committee on cybersecurity, asking for urgent discussion and dialogue to hopefully arrive at some kind of compromise, but in the meantime this definitely does not bode well for these companies.

Filed in Cellphones. Read more about China and Legal.

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