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China's New Law May Cause Mass Tech Exodus

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Control: China's new law allowing them access to secrets. Option: Foreign companies may choose to leave. Command: Privacy.
Control: China's new law allowing them access to secrets. Option: Foreign companies may choose to leave. Command: Privacy.
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China is the world's largest tech market with the most internet users of any other country. In recent years, China had grown into something of an economic superpower with the majority of said power originating from tech.

China recently revealed the final form of its new national security law which calls for a "national security review" of the technology industry and foreign investment. There is also the stipulation that the tech be "secure and controllable," a phrase that frightens companies in the tech sector, as compliance may require companies give the government back end access to company secrets.

Granting this kind of access to outsiders could open many businesses to attack as there are concerns that 3rd parties without a vested interest in the security of the company with such access may result in the theft of IP. Employees with back end access remain one of the biggest risks to a company's cyber security.

Considering that China has such a large tech market, it has been in the interest of foreign tech firms to acquiesce to China's policies regarding censorship. Businesses unwilling to play ball are forced out. One famous incident was the withdrawal of Google from China following a hack intent on finding the Gmail addresses of political dissidents.

New foreign tech businesses like Evernote and LinkedIn have survived in China by working with the government to censor content and sharing customer data. However, sharing and making available company secrets and IP to the eyes of the Chinese government may be too big a price to pay for admission.

With the recent rash of record breaking cyberattacks, it's understandable why companies are so wary of giving third party access to their systems. After all, the law says nothing about the Chinese government being responsible for any breaches of information that may come as a result.

Many American Companies have protested the new law, suggesting that businesses may pull out of China over this. "U.S. tech companies will be faced with a very difficult choice because they will have to decide whether they want to stay in China and basically submit to surveillance," said Robert Atkinson head of the Information Technology and Innovation Foundation.

With American businesses pulling jobs out of China in effect ending the "made in China era," and this new law possibly killing the foreign tech industry, China may be looking at the loss of its newfound superpower status.

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Mordecai is a freelance writer with aspirations to start his own consulting firm. He has traveled the globe and speaks 4 languages. In his spare time, he plays and repairs guitars and loves videogames.

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