While U.S. officials investigate whether Chinese hackers breached data for millions of federal employees, Beijing is working on a series of rules to protect itself from foreign cyber incursions—or maybe to get its hands on American tech secrets, or maybe both.
Beijing wants foreign technology firms to give up their source code in exchange for Chinese business, and new rules are set to make that happen, focusing first on the banking sector, and then moving to other important markets.
The first set of rules, from earlier this year, mandated that domestic banks move to "safe and controllable" technology—meaning any tech firm interested in doing business with most Chinese financial institutions would need to hand over its relevant source code and encryption keys.
"They want (source code) because they want to steal it," Steve Dickinson—a lawyer with Harris & Moure who specializes in foreign companies doing business in China—told CNBC. "American companies are freaked out about it—they're very, very freaked out about it."
After an outcry from the tech community (and reportedly from foreign officials) the banking rules have been shelved for now. But experts told CNBC they expect the regulation will be revived, and in the meantime a second set of rules that Beijing says will help it fight "terrorism"—and which would involve more business sectors than just banking—are on the way.