These measures show Beijing’s ambition to seize all communications, data, and other information stored in electronic form that belong to foreign companies, according to author and China expert Gordon Chang.

“There will be no secrets,” he said. “Because [firms] have to turn over encryption keys, they can’t use VPNs [virtual private networks] to get around the rules. Everything they have in China on their networks will become available to the Ministry of State Security and the Communist Party.”

Companies use encryption technology to protect the confidentiality of information transmitted and stored on networks. However, no foreign company may encrypt their data or communication if China enforces these new rules.

Chang said that foreign companies might be prohibited from employing VPNs to protect their data and may even be barred from using private servers.

In addition, Chinese officials may share seized information with China’s state-owned enterprises to give them a competitive advantage against their foreign competitors.

The new cybersecurity rules may also result in foreign companies losing trade-secret protection around the world.

“If China actually enforces these rules to the maximum extent, they’ll be able to take over the Fortune 500,” Chang said. “So, obviously, we’ve got to do something about it. And the sooner we do something about it, the better it will be.”

(Excerpt from Epoch Times. Article by Emel Akan.)