China Maintains Censorship

The ‘WannaCry ransomware’ which happened on 12^th May, 2017 has affected over 150 countries surfacing as a global attack. This has led many countries to review their nation’s policies with regard to safeguarding their systems from vulnerabilities and taking measures to prevent such an epidemic from collapsing a Country’s vital data.

Chinese Foreign Minister, Hua Chunying said the attack reminded the Country of its vulnerability and the ‘importance of cyber security’. It is said that all data in the Country must pass through security reviews, MNC’s are the hardest hit with this new law in place, given the fact that data will now have to be stored in Chinese based servers which will demand a huge sum of money in order to obtain such infrastructure.  

China’s New Cyber Security Law

The new cyber security law instituted by China on 1^st June, 2017 resulted in a rather disturbing environment for foreign firms and companies. Collecting personal information from individuals will evoke a marginal cost for companies. Those who do not comply with the law will be fined an amount of 1 Million Yuan or even have their business licenses’ revoked.

Analysis

It is said that all data in the Country must pass through security reviews, MNC’s are the hardest hit with this new law in place, given the fact that data will now have to be stored in Chinese based servers which will demand a huge sum of money in order to obtain such infrastructure. Critics point out that the law that is imposed is known to be vague and almost infringing on a Company’s intellectual property as it inhibits trade and is intrusive to business operations. The new law will make it harder to do business in China by increasing costs which may also lead to domestic firms having an unfair advantage over foreign firms.

Demanding Infrastructure?

Beijing’s move to contain data onshore has many effects. For China, it would mean that the domestic tech sector improves by building infrastructure as more international companies will have to store data in the country, thereby increasing job opportunities in the white collar sector.

China has transcended and transformed drastically from a centrally planned economy to one that is market base, with its economy being rated the largest in terms of purchasing power parity. However, this move in the name of ‘national security’ hinders the prospects of doing business in China, for foreign companies.