US comes under fire over 'discriminatory' cybercrime law

Officials have criticized a new law aimed at improving national security, labeling it "discriminatory" against Chinese firms.
Written by Charlie Osborne, Contributing Writer
Credit: CNET

A council which discusses relations between China and the United States has criticized a new law which aims to shore up security by discouraging the Justice Department and other governmental agencies from purchasing IT equipment from Chinese firms.

Under the new law, NASA, the Justice and Commerce departments and the National Science Foundation will have to seek permission from law enforcement agencies before purchasing any IT system that has a connection to Chinese manufacturers -- whether due to direct production or because a firm involved in the supply chain is owned, directed or subsidized by China.

On Monday, the U.S.-China Business Council council's president, John Frisbie, sent a letter to the Senate which stated that the United States' national security is of paramount concern, but it should not be used as a way to restrict international trade. This kind of protectionism, which is more commonly used to secure local jobs, is not appropriate as a means to blanket one whole country as a security risk -- instead, risks to security should be measured on the product itself. The council president told Reuters:

"Product security is a function of how a product is made, used, and maintained, rather than by whom or where it is made. Imposing a country-specific risk assessment creates a false sense of security if the goal is to improve our nation's cybersecurity."

Frisbie has also encouraged the Senate and the House of Representatives to prevent such measures in future legislation.

Chinese officials have asked that the law be stopped in its tracks, as it is apparently an "excuse" to discriminate against Chinese products. Business groups, the Information Technology Industry Association and Business Software Alliance among them, have asked for patience and reconsideration of the new law. The fear is that if the law passes, it may not only harm U.S. interests in Asia, but will also impact the competitive nature of the industry.

Whether a side-effect of restricting one country's products in order to remove its integration into national infrastructure will be advantageous to home-grown tech firms remains to be seen, but internationally, there could be long-term political implications of such a move and effect more than technological trade.

Information technology-related products that originate from China have been under scrutiny over the past year. Telecom equipment maker Huawei recently admitted the firm will see no growth in the United States in 2013, and although it expects sales in Europe and Asia to remain strong, security concerns prompted officials in the United States to advise caution when buying the Asian company's products. In addition, ZTE was also brought under fire in reports that suggested both firms' products may contain malicious code that could infiltrate American networking infrastructure.

Chinese products are not the only issue that the Obama Administration is concerned with. The president recently said that cyberattacks thought to originate from China -- and which are potentially state-sponsored -- mean that cybersecurity will be a "key" issue in future political talks with the country.

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