Feb 06, 2017 07:31 PM

New Law to Screen Online Products, Services in Key Sectors

(Beijing) — Online products and services in critical industries like finance, telecoms and energy will be audited for vulnerability to information leaks and hacking, China’s online security watchdog said, in the nation’s latest move to boost cybersecurity.

The Cyberspace Administration of China, which doubles as the Office of the Central Leading Group for Cyberspace Affairs that directly reports to President Xi Jinping, in an internet posting on Saturday sought public opinion on its draft internet product and service security inspection law, a follow-up to the sweeping Cybersecurity Law that was passed last November and will take effect in June.

The draft spells out who exactly will be responsible for putting different elements of the Cybersecurity Law into practice and how, said Shen Yi, deputy director of the Cyberspace Governance Research Center at Fudan University in Shanghai.

“Though such inspections alone are not enough to ensure that the hardware and software on supply chains will be safe, they are imperative to establishing and enhancing the nation’s cyber governance and sovereignty,” Shen said.

The new measures are mainly designed to find and eliminate loopholes in products used by public infrastructure operators, according to the draft. Products and services will be scrutinized to prevent malicious manipulation, interference, or interruption of services, as well as piracy and theft of key components, it said.

Together with a third party committee, the Cyberspace Administration will lead a Security Inspection Council, and will assess the controllability and security of products ranging from payment systems to hydropower monitoring software and commercial satellites.

The council is required to publish its findings and conclusions to the public and release evaluation reports.

Shen said the new rules are designed to review suppliers and their products currently in the supply chain in crucial industries to find potential security risks. “This law will be an important instrument that gives China discretionary power over key sectors, and we should expect it will be implemented under national treatment principles,” he said.

Foreign firms have complained that the law’s new requirements often force them to reveal important proprietary information and work with local partners, many of them state-owned entities with government ties. Others remain skeptical over the potency of the new laws, including concerns over unwanted consequences.

“There’s nothing to be said against state security, but perhaps it’s a mistake to make such inspections the norm, instead of simply a countermeasure in certain political climates,” said an industry observer who spoke under the condition of anonymity.

Contact reporter April Ma (

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