The NY Times reports that the Chinese government has adopted a set of supposed cybersecurity regulations on western companies selling technology to banks. These requirements are so absurd that it would be impossible for companies like Apple to comply.
The Chinese government has adopted new regulations requiring companies that sell computer equipment to Chinese banks to turn over secret source code, submit to invasive audits and build so-called back doors into hardware and software, according to a copy of the rules obtained by foreign technology companies that do billions of dollars’ worth of business in China.
The paper reports that while the regulations are so far limited to sales to Chinese banks, they are merely the first in a series of new cybersecurity policies expected to be introduced in the coming months, and businesses fear that they are designed to protect local manufacturers from western companies. It was recently announced that Apple became the biggest smartphone seller in China in the final quarter of last year …
It was revealed last week that Tim Cook had agreed to allow China’s State Internet Information Office to carry out security audits of Apple products sold in the country, but Apple has always insisted that it will never allow backdoor access to its products nor compromise the encryption used by its products and services.
China has for some time used both security scares and regulatory barriers against Apple, with this latest development suggesting that the country may be intending to significantly up the ante.
One theory raised in the NY Times piece is that the moves may be retaliation for an effective US ban on Huawei servers and networking products following concerns that they contained backdoor access for use by the Chinese government.
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Hmmmmm . . . . Anything to do with what the NSA and the other “Multi-Letter Security Agencies” have been embedding in US made / created hardware and software for untold years?
But we’re calling it “Chinese Protectionism Against Western Companies?” Paybacks are a bitch, Washington Politicians! Now you’re costing American based companies sales.
Apple’s response should be that if the only phones allowed in China must have ‘back doors’, then as Apple cannot agree to that, it will need to arrange for it’s iPhone manufacturing to be relocated out of China.
If it’s not allowed to sell it’s phones in China, then it should also stop having them built there too. It’s not as far fetched as it sounds, because before long, robotic assembly will make Apple less reliant on massive numbers of workers and it makes a lot of sense to diversify production.
However, I would imagine that the World Trade Organisation would view such a demand from China to be unreasonable protectionism.
No problem. Apple, like all manufacturers, will be induced to make weaker products exclusively for the Chinese market. And all products of Chinese companies will see fully retaliatory rules that will greatly diminish their sales outside of China.
Not ideal, but the only way a top producer of computer products can reasonably protect its reputation of keeping its customers secure.
Bait and switch! They let Apple sell a record amount of iPhones before requiring source code. Apple has no choice now. Time to short.
I’d like to see the US government allow Apple to repatriate their hoard of cash tax free so long as they build factories to make all their products in the USA. Then we can use protectionist tariffs on imported electronics. I see nothing wrong with protecting self-interest in your own country’s economic welfare.
I remember one review showed that the reason Apple cannot move the production line to USA is not cost (the cost for each iPhone are nearly the same), but the productivity, or efficiency… US workers are protected by so many rights that they just cannot be as productive as the Chinese workers…
It’s their pay, not their productivity. I’m in the UAW and am familiar with such issues. There’s also the illegal chemical processes keeping certain production out of the USA.
The cost of oil was forcing some repatriation of US company production and assembly but that is temporarily not an issue, the cost of shipping around the world.
It’s like now you need to wait 2 weeks~1 month in the first 1 or 2 months for the new launching iPhone, it could be 2~3 months or even longer of waiting if Apple moves the production line back to US…
China is funny. it doesn’t realize it was a US capitalistic market that built it and that same market can destroy it. they are really trying to make it difficult for companies to do business there.
No, those capitalists will not abandon China. The profits are to great and money talks
its already happening. a lot of manufacturing has come back to the US or gone else where over QC issues, Shipping cost (most people only look at the cost of labor) quality etc… supply chains are also starting to move in that regard.