​Business consortium wants China to change proposed cyber laws

A coalition of business groups are concerned that China's proposed cybersecurity laws will squeeze foreign competition out, harming trade and potentially violating international standards in the process.

A coalition of 46 business groups from the United States, Europe, and Asia has appealed to China to change proposed cybersecurity rules, warning the implementation will harm trade and isolate the country.

The action adds to mounting complaints Beijing is trying to squeeze foreign competitors out of promising industries in violation of the communist government's market-opening commitments.

In a letter to Premier Li Keqiang, the country's top economic official, the groups warn proposed Chinese limits on information security technology might make data theft easier and violate World Trade Organisation (WTO) rules.

Signers of the letter include Washington DC-based Business Software Alliance, the US Chamber of Commerce, and bodies for insurers and manufacturers from Britain, Japan, Australia, and Mexico.

"The current drafts, if implemented, would weaken security and separate China from the global digital economy," said the letter, dated Wednesday.

A proposed cybersecurity law and separate rules for insurance companies would require technology providers to show authorities how their products work and to store information about Chinese citizens within the country.

According to the letter, the data storage rules "have no additional security benefits" and would "create barriers to entry" for providers. It also said being required to disclose how security products work might weaken data safety and count as trade barriers under WTO rules.

The groups appealed to Li to revise the proposed rules to follow international standards.

Chinese leaders say they need the controls to prevent terrorism and anti-government activity, but officials of Chinese industry groups quoted in the state press have said previous restrictions on the use of foreign security technology were also intended to shield the country's fledgling providers from competition.

China initially proposed the fresh wave of cybersecurity legislation in early 2015 to further tighten its grip on the county's information technology structure and further localise the use of tech products.

It was said previously by experts that the draft regulations, like many laws in China, could be interpreted broadly and, in extreme cases, could give authorities the power to shut off access to all websites that have not registered their web addresses in the country.

Business groups have complained over the past five years that Beijing is reducing market access for foreign companies as the government of President Xi Jinping tries to build up Chinese competitors.

That has fuelled trade strains with the United States and Europe at a time of anaemic global economic growth.

Restrictions on use of security technology in an earlier Chinese anti-terrorism law and rules for banks prompted a similar outcry from business groups that said they would prevent most use of foreign products.

It was reported previously that Xi believes countries should not interfere in the internal affairs of others and that internet sovereignty should be in the hands of each individual nation, saying that cyberspace must not become a "battlefield" between states, calling for greater cooperation on punishing cyber attacks and fighting terrorism.

"We should respect every country's own choice of their internet development path and management model, their internet public policy and the right to participate in managing international cyberspace," Xi said in his speech. "There should be no cyber-hegemony, no interfering in others' internal affairs, no engaging, supporting or inciting cyber-activities that would harm the national security of other countries."

Local media reported at the time that the president defended his nation's strict control of websites, saying it is actually necessary to keep public order.

China has long operated the world's most sophisticated online censorship mechanism, known as the Great Firewall.

Popular social media websites such as Facebook, Twitter, and YouTube, for example, are blocked in the country, with a pilot free-trade zone active in Shanghai in the past which allows access to such content, although still heavily restricted. Services including Microsoft Outlook and Gmail have also been banned.

At the beginning of last year, China upgraded its Great Firewall and began to crack down on the use of VPNs within the Middle Kingdom.

With AAP.