Channel NewsAsia

New anti-spying rules not likely to impact US-China business ties

Beijing said it will issue tighter checks on internet technology companies that do business in the country. Analysts Channel NewsAsia spoke to said they do not think American companies will feel much impact from the new rules, at least not while China wants to do business with the US.

NEW YORK: A Chinese government report has accused the United States of internet surveillance into its leadership and key national institutions.

Beijing has also said it will issue tighter checks on internet technology companies that do business in the country.

Analysts Channel NewsAsia spoke to said they do not think American companies will feel much impact from the new rules, at least not while China wants to do business with the US.

The government is asking banks to replace their servers – to swap those made by American-owned IBM with a local model.

Reports said Beijing also wants state-owned companies to cut ties with US consultants.

The acts are likely retaliatory, provoked by accusations that Chinese officials hacked into American companies and stole information.

China beat down the charges, but Beijing is demanding new security assessments for internet technology companies working in the Chinese marketplace.

The new rules would require US-based companies like IBM, Cisco Systems and Microsoft to share sensitive data and encryption information with China.

Analysts said the restrictions are less about interrupting business, but more about sticking up for the alleged hackers.

Financial analyst Steven Leeb said: "If they shut those companies down, it would have a negative effect on Chinese development.

"The punishment that they will try to get out is not going to be so much as to damage the Chinese economy.

"It will be very crafted, if anything, to help the economy and also make the clear point that (China) does regard (the companies) as very important and (China) won’t tolerate this."

China claimed the new regulations are meant to prevent espionage, but those in the US think the fight is not about spying, but stealing.

Jon Huntsman, former US ambassador to China, said: "Let's not confuse espionage with the theft of intellectual property, I don't think Americans are getting the full flavour of simply the damage done when you rip off innovation, trade secrets and good ideas that results in jobs and creating the industries of tomorrow."

US companies in China are already under the government's watch - state agencies supervise all foreign businesses.  

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