OFF INTO THE WILD WET YONDER How does this...
The Chinese government announced Monday that it plans to suspend (for now) its proposed policy that would require government-accessible “backdoors” to banking communications as well as place severe restrictions on the use of foreign technology by banks within the country.
This decision to postpone comes in the wake of harsh criticism from numerous tech companies as well as the U.S. Chamber of Commerce, which expressed strong concern that the proposed policy was protectionist and a clear attempt to shut out foreign companies from providing technology to domestic banks.
Jointly issued by the China Banking Regulatory Commission and the Ministry of Industry and Information Technology, the announcement stated that “the guidelines will be revised and perfected, after which they will be reissued for implementation.”
The current rules, which were intended to go into effect this month, are heavy-handed as well as numerous. They require companies to turn over source code for software, utilize encryption technology almost solely from Chinese vendors, and install a “backdoor” in their systems which allows Chinese authorities to have surveillance access to communications. In addition, many companies would be required to set up R&D centers in China.
The policy seems to be in step with the Chinese government’s ongoing efforts to prop up domestic technology and innovation, mainly by pushing out foreign technology. When implemented, the policy will no doubt hurt several major U.S. businesses. What it will also do is leave a (huge) gap that Chinese companies simply cannot fill, given the extent of their current state of dependency on foreign technology.
Billions are spent on foreign-made servers and mainframes for banks, and Chinese companies are far from able to fill these needs on their own, according to The New York Times. And with an eye on the overall market, IT spending in China is expected to hit US$465 billion this year, a fast-growing market that big players such as IBM, Apple, and Microsoft have a considerable piece of.
Many hope that as part of the revision process, the Chinese government will carry out public consultations and more seriously consider input from those who have the most at stake. As there are no other details as to when the revised policy might be presented, it is anyone’s guess (at best) as to whether or not the government will.