China publishes draft of three-year cybersecurity plan

It follows the recent listings of Chinese companies on the New York Stock Exchange. According to the draft, companies that possess the personal information of a million or more users will be required to be reviewed by China's Cybersecurity Review Office before any initial public offering in a foreign country

China publishes draft of three-year cybersecurity plan

The listing of China's Didi on the New York Stock Exchange last month. Photo: REUTERS/Brendan McDermid

The Cyberspace Administration of China, the country's top online regulator, published a draft of a three-year action plan aimed at developing the cybersecurity industry in the country, and estimated that the sector may be worth more than $250 billion yuan ($38.6 billion) by 2023.  

According to the draft, companies that possess the personal information of a million or more users will be required to be reviewed by the Cybersecurity Review Office before any initial public offering in a foreign country. "The measures and the new Cyber Security Review Office are necessary to better enforce the National Security Law, Cyber Security Law and the Data Security Law," said a report in the China Daily, an English-language news website that operates on behalf of the Chinese Communist Party.    

These moves did not come in a vacuum. The recent steps by Beijing were taken amid an investigation by the regime of the Chinese ride-hailing app Didi Chuxing, or "Didi" in short, based on a claim that that the app collects the personal information of users in a manner that violates laws. Didi, which was nicknamed "the Chinese Uber", was listed with a value of $67.5 billion about two weeks ago, and is now being traded on the New York Stock Exchange. The app was removed from the Chinese stores several days after the start of trading, and the stock plummeted.  

The concern: loss of control over data located outside the country 

The U.S. under the Biden administration considers the Chinese cyber threat as the most significant among the countries operating in the field, and is acting tirelessly to recruit its allies around the world for the joint struggle. President Biden dedicated a great amount of time to the topic at the NATO and G7 summits that took place last month. The limits that China imposes on its own companies trading in foreign markets, mainly the U.S., show that it understands very well that it too is in danger.    

Other Chinese companies traded on the New York Stock Exchange, like online job listing service supplier Khanzun and truck-hailing logistics platform Full Truck Alliance, are currently being investigated.  A number of months ago, there were headlines over the investigation of online retail giant Alibaba (as well as the mysterious disappearance of its founder, Jack Ma), which ended with an enormous fine of $2.8 billion. The Ant Group (part of Alibaba), the largest fintech company in the world, was forced to make changes in its operations following the investigation. And there are many more examples.   

According to the official Chinese position, as expressed in the China Daily, "The measures have been released as several internet companies listed in overseas stock markets are being investigated due to cyber security concerns. Although the draft regulations do not stem from the ongoing probes into these platform companies, they explain why they are subject to the cyber security investigations." The article also said "It is the fast development of the internet industry and the rising uncertainties in external environment that have prompted the country to deepen its understanding of the urgency and necessity to strengthen its cyber security fences."

"China's concerns over personal data are exacerbated when the data is at risk of being controlled by U.S. interests," said Brock Silvers, managing director at Hong Kong-based investment company Kaiyuan Capital, in an interview with CNN. He added that it was "no coincidence" that the companies were investigated immediately after raising capital in the U.S. In May, the CEO of Tesla, Elon Musk, set up a data center in China to store local user data amid concerns that the U.S. might engage in espionage under the disguise of the company. 

You might be interested also