As noted recently in the Wall Street Journal, "New cybersecurity
rules will give Chinese authorities sweeping powers to inspect
companies' information technology and access proprietary
information—steps that are likely to deepen concerns among
foreign businesses about their China operations." These
regulations were issued pursuant to the Cybersecurity Law of the
People's Republic of China, which came into
force on June 1, 2017.
The new rules, which take effect November 1, 2018, have the
potentially for chilling foreign firms from doing business in
China, or at the very least increasing the costs of doing business
there. Many fear this law could be used to force companies to
disclose source codes and other corporate secrets as part of their
efforts to demonstrate their systems were secure. Even
so, some tech giants (including Microsoft) have started to build
data centers in China, to abide by the ban on storing certain data
outside of China.
