ITIF Statement on China’s New Security Law

July 1, 2015

WASHINGTON—The Information Technology and Innovation Foundation (ITIF) released the following statement regarding China’s new security law:

The adoption by the Chinese legislature of a new national security law is just one more step in the now almost ten-year-old effort by the Chinese central government to drive “indigenous innovation” by a host of unfair and mercantilist policies. These policies, including the provisions of the new national security law that require the use of “secure and controllable technology” are part of a strategic effort to reduce the market share of foreign IT companies in China in order to build up the capacities of Chinese-owned IT companies. The goal is for Chinese companies to ultimately supplant foreign technology companies both in China and in markets around the world. The tactics involve massive government subsidies, theft of foreign know-how, forced technology transfer in exchange for market access—and now these new provisions allowing the Chinese government to keep out foreign technology.

The claim by the central government that this law is necessary to ensure IT security in China is simply false. Rather, China adopted this provision in order to use a loophole in World Trade Organization rules allowing protectionist policies if they are stated to be for national security purposes.