American President Barack Obama criticized China's plans for new rules on U.S technology companies, urging Beijing to change its policy if it wants any business to happen between the two countries. In an interview, Obama said he was concerned about Beijing’s counter terrorism law that would require technology firms to hand over encryption keys, the pass-codes that help to protect data, and install security  ‘’backdoors”  in their systems to give Chinese authorities to have surveillance access.

"This is something that I have raised directly with President Xi," Obama said. "We have made it very clear to them that this is something they are going to have to change if they want to do business with the United States." The Chinese parliamentary body read a second draft of the country’s first anti-terrorism law last week and is expected to adopt legislation in the coming weeks or months. As to the draft companies need to keep the servers and user data within china, supply law enforcement authorities with communication records and censor terrorism related Internet content.

This will allow Chinese government to force on foreign companies to turn to their mechanisms and allow snooping and tracking the data and services. Obama said, “As you might imagine tech companies are not going to be willing to do that.”  The rules will effect financial industry regulations by pushing Chinese banks to purchase from domestic vendors. The effects are felt on Silicon Valley companies and set the stage for clash over cyber security and technology policy. On the other side Beijing wants to quickly tighten measures for cyber security as a wakeup call from whistle blower Edward Snowden’s revelations of U.S spying. 

By Premji