Information technology (IT) has created new channels for growth and revolutionized how companies do business. With the largest number of Internet users in the world, China has become a global hub for innovation in mobile application development, smart devices, ecommerce, mobile payments, and other frontiers of technology that integrate big data with internet-based functions to enhance traditional business models.
At the same time, governments worldwide are faced with the challenge of regulating the development and growth of new technology in ways that are efficient and safe for all users, while balancing appropriate governmental requirements with the needs of businesses and individuals. Chinese policymakers, like their counterparts around the world, are developing measures to address data privacy and information security, as the growth of new technology challenges traditional regulatory frameworks to adapt.
Seventy-nine percent of US-China Business Council (USCBC) members cited concerns about China’s approach to information flows and technology security in USCBC’s 2016 member survey, largely due to the impact those policies have on companies’ ability to conduct day-to-day business. China’s current regulatory regime affects the operations of companies — both foreign and domestic — in ways unseen in other markets. Many policies in China make it unclear if companies may use their global best practices in innovation and technology security in the country. As a result, companies are restricted from using many technology solutions that combine operational efficiency with globally-proven technological safeguards – including the exchange of information used to combat security threats - creating vulnerabilities in an increasingly global digital economy.
USCBC’s recommendations explore some of the specific obstacles companies face when using information technology in China, are based on extensive interviews with company technology officers, and provide potential solutions that balance operating and security needs. They are proposed to provide constructive solutions to address the concerns of all sides in a practical manner. USCBC appreciates the opportunity to provide these recommendations and would welcome the opportunity to discuss them with Chinese regulators.