China’s New National Security Law Emits An Icy Blast

CHINA HAS PASSED a National Security Law that sweeps a broad range of economic, political and social activities within its remit. The new legislation is far more all-encompassing than the counter-espionage law that it replaces. Pretty much anything Beijing wants to consider as a matter of national security it now has the legal footing to do so.

That can include ideology and culture, energy security, economic development, information, financial stability and just about everything in between. Civil rights campaigners have expressed disquiet about China’s growing crackdown on activism and dissent. Those concerns are only likely to be amplified by forthcoming counterterrorism and foreign NGOs legislation.

However, the greatest impact of the new law could be felt by companies. It requires that internet and information systems must be “secure and controllable” by the government. That makes foreign financial firms and IT companies extremely uncomfortable, but all foreign firms should be uneasy.

Much will depend on how discriminating China chooses to be in implementing the new National Security Law. Many ministries and agencies can make use of it to pursue policy objectives, including the promotion of domestic national champions. Some parts of government may use the new law aggressively, others sparingly.

The selectiveness of application can give foreign companies the impression that they risk having the law brought down on them seemingly randomly. That, in itself, will have a chilling effect.

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