China to increase vigilance on Tech Cos with new set of rules

China to increase vigilance on Tech Cos with new set of rules
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5 Jan, 2022

The Chinese government will increase vigilance through two new rule set on local technology companies that provides services locally as well as overseas. 

Under the review process, the Chinese government can ask tech companies to undergo organisational changes to align themselves to the cyber security review.  

The initial rules, to be enforced on February 15, looks at reviewing technology companies in China on cyber security grounds having personal information of over 1 million users before being allowed to list on stock exchanges of countries outside China.  

“Cybersecurity review insists on combining the prevention of cybersecurity risks with the promotion of advanced technology applications, the combination of fairness and transparency in the process with the protection of intellectual property rights, the combination of prior review and continuous supervision, and the combination of corporate commitments and social supervision,” said a Cyberspace Administration of China (CAC) statement.  

It further said that “when a key information infrastructure operator purchases network products and services, it shall predict the national security risks that may be brought about by the products and services after the products and services are put into use. Those that affect or may affect national security should report to the Cyber ​​Security Review Office for a cyber-security review.” 

The next set of rules by CAC, which is to be enforced on March underlines that algorithm recommendations by tech companies will be reviewed. 

“The national cybersecurity and informatization department is responsible for the overall planning and coordination of the national algorithm recommendation service governance and related supervision and management. The State Council's telecommunications, public security, market supervision and other relevant departments are responsible for the supervision and management of algorithm recommendation services in accordance with their respective responsibilities,” said CAC. 

All these will further add up to the uncertainty at the tech company’s end at China lead to a tech clampdown.