Foreign media: U.S. technology companies stranded in the Chinese banking industry it New deal

Lead: The Wall Street Journal online edition of the Sunday article said that the U.S. technology companies will need to make tough decisions in the face of China's new banking information security rules. But there are signs that Beijing may abandon some of its moves to limit IT companies ' sales in the Chinese market.

The following is the full text of the article:

As to how to turn internal technology into a system that the Chinese government deems safe and controllable, major banks need to submit their programmes by the deadline, that is, by Sunday. The new requirement requires the technology provider to submit proprietary source code, as well as an encryption key to protect sensitive data, using China's encryption key and conducting intensive testing. This has raised concerns in some trade groups in Europe and the US. They believe such a move is excessive.

Some technology executives privately say they believe China could reduce its demand for source code, which is also the focus of the current dispute. However, as the Chinese government tries to reduce its reliance on foreign technology, global technology companies are not choosing much: submitting private information in exchange for the Chinese market, partnering with Chinese companies to set up joint ventures, developing products tailored to the Chinese market, meeting the requirements of the Chinese government, or leaving.

Industry insiders say the government has issued orders to banks to switch to Chinese manufacturers ' products. Such a requirement would seriously affect U.S. companies ' sales in the Chinese banking market.

Trade organizations and industry insiders said that in recent days, officials in China and the United States have had a lot of discussion about technical regulations. The issue was also discussed last week when Robert Holeyman, the US deputy trade representative, Robert Horiman a visit to China.

The source said U.S. Embassy officials visited China's banking regulator in Thursday. In addition, Chinese Deputy Prime Minister Ma Kai will attend the German CeBIT enterprise Information technology trade show this week, and he would also communicate with the relevant people on banking regulation rules.

At the same time, technology companies need to wait and see how Chinese banks will enforce these rules. Although banks need to submit their initial plans in Sunday, they will eventually be implemented on a yearly basis and in 2019 the target of 3/4 systems must be safe and controllable. The specific requirements are varied, including the procurement of desktops, as well as the study of how to replace the currently used mainframe.

Many Chinese banks have set up teams to assess how to reduce dependence on foreign technology, but this will be a lengthy process, a banker said. Most key systems in China's banks have adopted foreign technology, according to industry sources.

The CBRC did not comment on the news. In February of this year, as the technology industry was dissatisfied with the new regulation, the CBRC said it would listen to all parties ' comments on source code issues before enforcing the rules.

Peter Allgeier, President of the Service Federation, which is based in Washington, D.C., said the Pitt Argueres is that "these industrial policies are designed to help Chinese companies at the expense of foreign companies and to introduce Chinese technology into companies." He says many foreign companies worry that their technology will eventually fall into the hands of Chinese rivals.

Industry insiders say that, given the government's use of regulatory power and the desire of many companies to remain in the Chinese market, there is not much to choose from. "There are concerns that this trend will spread and get out of hand," said one source. ”

A series of moves by the Chinese government have alarmed foreign companies. Recently, foreign companies in a number of industries have been confronted with antitrust or anti-corruption charges, involving industries such as automobiles, pharmaceuticals and technology. In addition, China's draft anti-terrorism law requires telecoms operators and Internet service providers to assist China's national security services, which has also been criticized.

Edward Snowden, a former employee of the U.S. National Security Agency (NSA), Snowden that the U.S. government uses technology companies to conduct intelligence activities abroad. Affected by the news, the Chinese government began to seek to get rid of its dependence on foreign suppliers. Chinese state media have questioned the security of information about U.S. technology companies such as Apple and Microsoft. Apple has said it has not allowed government departments to access its servers directly, while Microsoft has announced how the company has rejected government requests for data.

Trade groups say the government will also make similar technical rules for other sectors deemed critical, such as transportation and energy. Market research firm IDC says it spending in the Chinese market will grow by more than 11% this year to $465 billion trillion.

"The question is whether the regulation of the banking industry bodes well for broader information security requirements for more industries in China," said Paul McKenzie, Morrison & Foerster LLP, a beijing-based lawyer. He said foreign IT companies might consider localizing the Chinese business or developing products specifically targeting the Chinese market to meet the government's network information security requirements.

At present, these foreign companies are seeking the help of European and American trade organizations, the banking regulatory provisions and the draft anti-terrorism law to further consultations.

(Responsible editor: Mengyishan)