It was widely reported last week that the Chinese government plans to release new cybersecurity regulations for the banking sector. Among other things the proposed regulations require any technology vendors to banks in China to disclose their source codes to the Chinese authorities, adopt Chinese encryption algorithms and undergo intrusive security audits. It has drawn huge attention from western technology companies and has provoked concerns that under the proposed regulations, they will be forced to disclose highly sensitive intellectual property.
It was also reported that these restrictions in the banking sector are just the first step and China ultimately aims to create a “cybersecurity vetting regime” to assess all Internet and information technology products across all the sectors in the next few years. Foreign companies operating in China should pay close attention to the developments of this matter.