IT Groups Warn Chinese on Regulation

Financial Time’s Kathrin Hille reports from Beijing:

The US and the European Union are pushing China to soften or drop plans for compulsory certification of a range of technology products, as warn that Beijing’s regulatory requirements are pushing them out of the market.

The complaints come after Google’s announcement last month that it was reviewing the feasibility of operations in China, saying it had been attacked by hackers based there. This highlighted a broadening conflict between Beijing and foreign businesses over information security and intellectual property.

Rules set to take effect on May 1 will exclude suppliers of encryption-related products such as firewalls, secure routers or smart cards, from government tenders unless they undergo testing and certification to meet Chinese standards. In some cases, this will require submitting software source codes and other confidential information.

Foreign businesses fear the authorities could pass information on to their state-owned competitors. They also argue that their products could become unsafe if Beijing used its knowledge of software architecture to install “back doors” for surveillance.

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