China will block foreign tech firms from investing in China if it implements proposed cybersecurity regulations, U.S. Commerce Secretary Penny Pritzker said Tuesday.
Pritzker made her remarks in China as part of a trade delegation, Reuters reported.
“I have heard from numerous American CEOs that they are either avoiding the Chinese market or planning to reduce their exposure here,” Pritzker said. “They fear that the rules favor indigenous companies or that their intellectual property is at risk, or they worry that regulations will change unfairly.”
Analysis by Rose Law Group Cyber Law Attorney Logan Elia:
“The United States has been attempting to normalize its trade relations with China since Nixon’s historic visit in 1972, and with much success. China is now one of the United States’ largest trading partners.
“But US-China relations are consistently strained by military distrust and strategic jockeying for relative gains in geopolitical influence. Unfortunately, this jockeying often comes at the expense of consumers and businesses in both countries. The United States has been reluctant to export certain advanced technologies to China in the name of national security while happily importing some of the world’s finest consumer electronics from China.
“At the same time, China-based retail giant Alibaba, which had the largest global initial public offering in history last year, is consistently criticized for illegally profiting from the sale of pirated intellectual property. Many people in the United States believe that China’s government turns a blind eye to this infringement. This belief persists despite that Chinese President Xi Jinping recently arrested China’s security tsar on corruption charges.
“This was done as part of an anti-corruption drive that resulted in multiple executions. In this context, it is sad, but not surprising, that China would raise trade walls allegedly for national security. It is understandable why world businesses are reluctant to hand over proprietary information to China’s intelligence community.