China’s New Cybersecurity Law Could Cost Foreign Companies Their Ideas

For years China has known that it has a cyber-security problem. On June 13, 2013, the U.S. whistleblower Edward Snowden gave an explosive interview to the South China Morning Post while he was in hiding in Hong Kong. The National Security Agency, Snowden said, had carried out 61,000 global hacking operations, including in Hong Kong and mainland China.

For U.S. tech companies operating in China, Snowden’s revelations were bad news. As suspicions mounted, Cisco, an IT and networking multinational company, saw its Chinese revenues fall by 18 percent compared to the last fiscal quarter. Beijing began pushing for firms to use domestic telecommunications equipment and began making plans to shore up China’s cybersecurity. Now this plan is a day from being realized.

On June 1, China’s first cyber-security law will come into effect. Wide-ranging and loosely worded, it is likely to make life much harder for foreign companies

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