China about to pass law that restricts technology exports

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The Export Control Law is expected to be approved later this Saturday by China’s main legislative body, the Standing Committee of the National People’s Assembly. As the agency advances Bloomberg, the main purpose of this law is to protect China’s national security, when supervising the export of materials and technologies included in a checklist. The law will apply to all Chinese companies, including those with foreign investment.

When the bill was presented for the first review, Chinese Trade Minister Zhong Shan explained that export control is a mechanism that aims to “honor international obligations and safeguard national security and development interests”.

The move will increase Beijing’s legislative arsenal and help China move closer to the position of the United States, which regularly uses strategic export controls against its opponents. “Chinese authorities may have learned a lesson from the United States and other countries”, said Qing Ren, a partner at Global Law Office in Beijing, Bloomberg. A report released by the official Xinhua news agency said that the bill stipulates that China could take reciprocal action against a particular country or region that “has abused export control measures and harmed China’s national security and interests” .

China’s existing checklists are much more circumscribed than those of the USA, being limited to materials that could be used for nuclear, chemical or biological weapons. In the case of expanding that list, “then more products or technologies will be subject to control in China,” explained Ren. The Chinese Ministry of Commerce partially updated this export control list in August, placing cutting-edge technologies, such as recommendation algorithms and drones, under Beijing’s supervision.

The Chinese media advance that some legislators have suggested that source-codes, algorithms and technical documents were added to the list of controlled items, and that China should set some restrictions on the export of technologies in which Beijing has a competitive advantage, such as 5G and quantum communications. Whether Beijing will allow the export of valuable Chinese technology is one of the big questions that must be addressed.

China is the country that contributes the most to exports worldwide and sales abroad provide jobs for millions of people. For this reason, Mei Xinyu, a member of a research group at the Chinese Ministry of Commerce, says that the China will be careful “not to abuse” the law. “We highly value China’s image as a reliable supplier on the international market,” Mei Xinyu told Bloomberg. “Therefore, we would not arbitrarily extend the scope of export controls,” he added.

As the Bloomberg, foreign companies are excluded from this new legislation, as it applies to all companies operating in China. However, Qing Ren explains that Foreign-owned companies should be alert if their activities involve the export of technologies. “Chinese employees may not be allowed to send the technologies under control to their foreign colleagues. This depends on the very specific circumstances of each company. But it can happen ”, explains Ren.
US-China trade war
Rising tensions between China and the U.S. have reached the realm of technology, with large Chinese companies like Huawei, TikTok and WeChat in Washington’s sights.

As technology that promises to revolutionize the world, 5G is at the center of the disagreement between the two powers, with the United States lobbying partners to ban Huawei – the world leader in 5G network equipment – and adhere to a blockade of Chinese technology. Due to its alleged links to the Chinese government, Huawei has been scrutinized by Western countries, with the Trump Administration maintaining an active campaign against the company, accusing it of spying and trying to steal secret data.

In the space of just over a year, Washington has revised its export control rules for the Chinese telecommunications group Huawei three times, affecting Chinese company suppliers worldwide.

In the past two years, Donald Trump’s Administration has placed another 70 Chinese companies on the Commerce Department’s List of Entities, limiting its access to American technology.

China’s leadership in 5G gives you a competitive advantage in the field of artificial intelligence for a simple reason: more devices connected to networks mean more data. And the more data, the better the ‘training’ of the algorithms [que aprendem padrões], allowing the development of applications based on artificial intelligence. For analysts, those who master 5G technology will lead the 21st century.

More recently, Chinese digital applications TikTok and WeChat have also entered the debate, with the US once again claiming “national security” reasons. “The Chinese Communist Party has demonstrated that it has the means and intends to use these applications to threaten national security, foreign policy and the economy of the United States,” argued the Department of Commerce.

China had already threatened to retaliate after the US president announced that the use of these applications would be banned in the United States. “If the United States persists in its unilateral actions, China will take the necessary measures to resolutely protect the rights and legitimate interests of Chinese companies ”, the Chinese Ministry of Commerce reported at the time.

Trump’s wish was ultimately unsuccessful after a U.S. judge decided in late September to suspend the order given by the Trump Administration and maintain the TikTok application on mobile application download platforms in the United States.

c / The day after tomorrow

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