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IN DEPTH: Exclusive interview with Tom MillerEffects of China's New Cyber Security Law in Business
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Effects of China's New Cyber Security Law in Business

By Rose Salas

BT 201708 IN DEPTH 06早在去年11月7日,十二届全国人大常委会第二十四次会议审议并通过了《网络安全法》,该法于2017年6月1日起施行。该法的正式通过和实施意味着中国在信息化时代的网络安全方面将有法可依,并将开启一个网络安全的新纪元。《网络安全法》全面和系统地确立了各个主体包括国家有关主管部门、网络运营者、网络使用者在网络安全保护方面的义务和责任。另外,它确立了保障网络的设备设施安全、网络运行安全、网络数据安全、以及网络信息安全等各方面的基本制度。除此外,法律也明确规定了中央政府有权直接控制境内在线运营的公司。中国有着4亿移动互联网用户,因此我国也被视为最大的电商市场。因此,该法的施行多少也对众多公司经营造成了一定的影响,公司经营者需要深入了解法规详情,才能合法保护自身信息和合法利益。



BT 201708 IN DEPTH 05The newly enhanced and stricter China's Cyber Security Law took effect on June 1st, 2017. According to analysts, it aims to provide safety measures to shield Chinese data from cyber terrorism and hacking. One instance to explain this is when Edward Snowden, a US whistle blower, uncovered that US was spying on communications from multinationals. The attack of WannaCry Malware also affected more than 30,000 institutions like major universities last month, causing their systems to be infected and be put to risk. The provision will uphold state security as they regulate the Internet based on national laws.

Implementation of this stricter law will allow the central government to have direct control over Internet-based companies that are operating in the country. Since China has almost 400 million smartphone users, they are considered as being the world's largest market for e-commerce and Internet-based services. Due to this, it garnered mixed reactions from business sectors claiming that it is a threat to international business. Nevertheless, despite speculations that the changes it will bring about to world economy have been declared counterproductive in so many ways, the government did not make further delays to implement the law. The objective is to penalize any online information that is deemed damaging to national honour and is a disturbance to economic or social order.

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Let's enumerate the major effects of this law in business:

1. The law includes data localization that would require Critical Information Infrastructure operators to store whatever personal information and data they may gather in mainland China. They have to acquire government certifications if they need to transfer the data outside. Any data that should be passed on outside the border must be reviewed and approved. As a result, the government will have more direct control on the over-all operations of Internet-based companies in the country. This means that network operators should censor information that are considered "banned" or "critical".

2. The new legislation will require Network Operators to provide technical support to security authorities when conducting criminal investigations and defending national security. This will require network service providers to provide back door access upon request. There will be a vast access to all information such as name, date of birth, identification numbers, address, phone numbers and biometric information from all state-owned competitors should network security incidents take place. They must work within the country's organizations to ensure the integrity of their network's security.

3. International companies who want to gain a foothold in the Internet business within China will need to adhere to restrictions of this law. Non-compliant companies can be impacted by this "great firewall" because it will be hard for them to trade in the country. For compliance, companies should align their business practices based on regulatory requirements of the law. They must pass security assessments annually. Increased penalties will be given to violators who will attack or jeopardize this cyber law.

4. It gave China an immense scope of advantage. Chinese companies can now control and operate cloud-related services in the Internet world. Foreign companies will have to deal with the rigorous process of new cyber security law to protect the country from increasing threats of cyber terrorism through cross-border flow of information.

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This Cyber Security Law created noise in the business world. International firms believe that if this law will continue to dominate, the risk of doing business in China will be too high. There are questions arising as to whether additional investments by multinationals will be needed to ensure compliance. Small-scale companies have fears as to whether they can survive having business given these new provisions. Foreign firms are convinced that the law can knock billions of dollars for cross-border trades.

Disregarding the confusion that it created, business experts in Beijing strongly agree that Cyber Security is very crucial to national security. These changes though may be overlooked as a threat to international businesses and innovation and are only safety measures in preventing cyber snooping and data protection for their citizen's privacy. The ripples it will generate are something we should watch out for.

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