Date
17 November 2017
US Treasury Secretary Jack Lew (right) is shown with Chinese Vice Premier Wang Yang in this file picture. On Monday, Lew pressed Wang to reconsider new rules that require foreign vendors to open a backdoor to their technology. Photo: Bloomberg
US Treasury Secretary Jack Lew (right) is shown with Chinese Vice Premier Wang Yang in this file picture. On Monday, Lew pressed Wang to reconsider new rules that require foreign vendors to open a backdoor to their technology. Photo: Bloomberg

China to delay technology rules after US lobbying

China will delay some bank technology rules after heavy lobbying from the United States and technology companies due to protectionist concerns.

However, it is unclear how long China will suspend the rules and if it will agree to suspend them to the extent the US wants, the Wall Street Journal reported Tuesday, citing a senior US Treasury official.

The guidelines, which took effect this month, require banks to buy “safe and controllable” technology products.

US trade groups say the rules will force US tech companies to submit to invasive inspections and give up trade secrets if they don’t want to be shut out as suppliers to Chinese banks.

US groups have lobbied the hardest against one rule that requires companies to hand over source code.

The China Banking Regulatory Commission (CBRC) has previously said the regulations are not meant to discriminate against foreign companies.

US Treasury Secretary Jacob Lew met with China Vice Premier Wang Yang on Monday and pressed him to reconsider the bank technology initiative.

It was the latest in a string of efforts by US officials and trade groups to pressure China on the issue.

Washington filed a “communication” to the World Trade Organization on Wednesday questioning the Chinese bank rules.

In the filing, the US said it is concerned that the requirements would “severely limit access to China’s commercial banking sector for many foreign ICT products, services and technologies”.

In February, the CBRC said it would take different opinions into consideration before implementing the rules.

Banks were required to submit initial plans earlier this month for meeting the goals and face a Wednesday deadline to begin implementation.

The requirements will be phased in over the next four years.

Suspicions of “backdoors” in foreign technology that enable foreign governments to gather intelligence have prompted China to tighten its regulations and promote the development of its domestic tech industry.

China is pouring billions of dollars into key technology sectors such as semiconductors and software to reduce its reliance on US companies.

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CG/RA

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