AmCham China Statement on the Draft Cybersecurity Law

It is essential that legislation in China as well as globally meets consumer demands without sacrificing security or efficiency. The draft law clarifies various aspects of cybersecurity, and with revisions could promote the healthy development of cyberspace. However, the draft law, without further clarifications, could undermine global trade, technological innovation, and the benefits of informatization. In particular, the lack of clear definitions and broad scope of the law could make it more difficult for the government to enforce it, as well as for companies to comply with it.

Moreover, the draft cites numerous other unclear laws and regulations, and in the context of the recent national security laws and regulations, it is unclear how they will all fit together, raising concerns over their enforcement. Data localization requirements in the law may create barriers to entry for companies seeking to expand into China, and may divert capital investments to other countries. These could particularly inhibit smaller companies from entering China.

AmCham China members already find China’s cyberspace a hindrance to doing business. In a survey conducted earlier this year, 94 percent said they believed China’s Internet controls hinder or greatly hinder the country’s ability to innovate, and 89 percent said the controls negatively impact their ability to conduct business normally here. AmCham China hopes that any new legislation in this area will promote the Internet’s ability to support business and drive innovation.

We appreciate the chance to provide comments on the law, but urge the government to ensure that national security standards are in line with international standards and are transparently developed with equal access for foreign companies.

James Zimmerman, Chairman of the American Chamber of Commerce in China