On July 1 — the 94th anniversary of the Chinese Community Party — China’s National People’s Congress passed a national security law that promised to involve the government in nearly every aspect of Chinese society. And the government is not mincing words in response to the jittery reaction of foreign companies.
Chinese state-run publication Xinhua published an editorial Tuesday lambasting foreign companies, telling them to “put their victim mentality to rest for good.” The editorial said that foreign businesses may feel entitled to special treatment in China, but “the lenient policies of yesterday have worn out their usefulness.” Grow up and “adapt to new norms,” the state mouthpiece wrote — words that certainly did not quell American companies’ fears.
The new law is particularly focused on cybersecurity, calling for “secure and controllable IT systems” as well as a “national security review” of the tech industry and foreign investment. Foreign companies are concerned the law means further restrictions and governmental meddling, endangering intellectual property, clients’ privacy and companies’ values.
Even more far-reaching is a prohibition against endangering national security or aiding those who do. But the legislation defines national security “extremely broadly,” according to a United Nations statement. A spokesperson for the U.N. High Commissioner for Human Rights said the rule creates potential for misuse aimed at civic organizations, religious groups, and other assemblies.
American companies have long struggled with the degree to which they cooperate with the Chinese government while working in the country. Google, for example, almost entirely left China in 2010 amid a disagreement with the government over censorship and cyberattacks against Gmail users. And American cloud providers, like Verizon’s EdgeCast, increasingly find themselves wedged between the activists who use their services to access and distribute banned content and the Chinese authorities trying to censor them. If the new law grants the Chinese government the sort of broad power that businesses fear—and the Xinhua editorial foreshadows—conducting business in China is bound to become even more ethically murky for foreign companies.
