China Technology Squeeze Extends to Pressure on U.S. Companies

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China technology companies have been under pressure from the authorities to conform. Beijing seems uncomfortable about unregulated social media comments by ‘unruly’ citizens, some of whom came under scrutiny following the Tianjin blasts, and a mixed reaction to the huge military parade. Beijing has been applying pressure on China technology giants to conform. Its biggest threat may yet be digital nomads who pack their servers in their bags.

China Technology Squeeze Extends to Pressure on U.S. Companies

Writing for The New York Times yesterday, Paul Mozur reflected on a document the China Internet Security Certification China Technology Centre apparently posted to some American tech businesses the other day. In it, it requested them to promise that they “would not harm China’s national security and would store Chinese user data within the country”. I should mention that Paul Mozur bases this on a leaked document, although the article does have a ring of truth.

Paul goes on to suggest the letter asks the companies to “ensure their products are secure and controllable.” In China technology culture, this could mean providing a regulator with encryption keys to the back door, whereby they could enter the database and perhaps even take temporary control if they had the source code.

American Technology Business on the Horns of a Dilemma

U.S. corporates including Apple, Facebook, IBM, Google and Uber are keen to take advantage of the opportunities the burgeoning China technology markets expose, before their onshore rivals stitch the market up. Speaking on the rebound from recent cyber-attacks, Barrack Obama warned, “if China … cannot figure out the boundaries of what is acceptable, we can choose to make this an area of competition, which I guarantee you we’ll win if we have to.”

We may yet learn the true extent to which Silicone Valley depends on China technology developments to keep it buoyant. I wonder whether it will take another knock, as Facebook did when it ceded turf to WeChat and Weibo.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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