China tightens grip over the Internet with new security law

U.S. trade groups are worried that China's security policies could stifle business in the country

China's Great Hall of the People.

China's Great Hall of the People.

China has adopted a new security law that gives the government control over its Internet infrastructure, along with any critical data.

On Wednesday, China's legislature passed the national security law, which covers a wide range of areas including military defense, food safety, and the technology sector.

A full text of the law's final draft has yet to be released, but it calls for better cybersecurity, according to a report from China's state-controlled Xinhua News Agency. The country's key information systems and data will also be made "secure and controllable" under the law.

Previous drafts of the legislation don't state in detail what that control might mean, exactly. But U.S. trade groups have expressed ongoing concern that China's security policies are going too far, and could push foreign businesses out of the country.

Earlier this year, China's anti-terror legislation drew complaints because it could require U.S. tech companies to hand over encryption keys to the country's government. U.S. President Obama even weighed in and has asked China to change the legislation.

In recent years, however, China has made cybersecurity a priority, following leaks from security contractor Edward Snowden that claim the U.S. had been secretly spying on Chinese companies. The Chinese government has even said it would block IT products from being sold in the country, if they failed an upcoming "vetting system."

The policy changes in China probably won't bode well for U.S. tech companies, especially for those who supply IT products to the government or state-owned companies, according to analysts. Already, China heavily censors its Internet, and has blocked many U.S. sites such as Facebook, Twitter and Google.

China, however, has said its new security laws are following what other Western countries have done to improve their cybersecurity.

"China has always maintained open policies to the rest of the world," said Zheng Shuna, a government official during a Wednesday press conference. "We welcome all foreign enterprises in China to abide by the laws, and offer legitimate services."

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