China holds back bill that worries US govt

Counter-terrorism law requiring IT vendors to hand over information to the Chinese government has been put on hold, following concerns raised by Barack Obama. But it's unclear if it will proceed with the law.

The Chinese government reportedly has held back a proposed counter-terrorism bill that would require IT vendors to hand over information, days after US President Barack Obama expressed concerns about the new law.

Senior U.S. officials said the move was a good indication for foreign tech companies, which saw the proposed bill as a significant obstacle to their operations in the Chinese market, reported Reuters. The law would require IT vendors to hand over encryption keys and install security backdoors to provide Chinese authorities surveillance access. They also would need to retain servers and user data in China and give law enforcers access to communications records as well as block terrorism-related online content.

Citing cybersecurity coordinator for the White House, Michael Daniel, the report said: "[The Chinese government has] decided to suspend the third reading of that particular law, which has sort of put that on hiatus for the moment. We did see that as something that was bad not just for U.S. business but for the global economy as a whole, and it was something we felt was very important to communicate very clearly to them."

While it remained unclear if China would proceed with the bill, the country's China Central Television reported that the bill was not scheduled to be read at the National People's Congress' annual session that had kicked off last week. Wang Aili, a senior official with the congress said a third reading and vote was slated to take place in "due time", according to the Reuters report.

The first draft was published in late-2014 and the second draft was read in parliament last month.

Last week, former U.S. director of national intelligence Mike McConnell said the Chinese government had hacked into the systems of "every major corporation" in the U.S. and accessed information. "We've never, ever, not found Chinese malware," McConnell said during his speech at the University of Missouri, adding that these allow data to be extracted whenever Chinese spies wanted them. These included "planning information for advanced concepts, windmills, automobiles, airplanes, spaceships, manufacturing design, and software".

He also noted that during the tailend of the Bush administration, the Chinese government employed 100,000 hackers exclusively to penetrate computers.

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