EU and US groups sound alarm on China cyber security rules

Christian Oliver and Tom Mitchell

European and US companies have asked their governments for urgent help in stopping the implementation of new Chinese cyber security regulations, which are expected to force local and foreign banks to use information technology equipment deemed "secure and controllable" by Beijing.

In a letter to the European Commission dated February 25 and seen by the Financial Times, six business organisations led by Business Europe and The City UK said the "worrisome" Chinese regulations "could close the door for many foreign IT companies to the Chinese banking IT market".

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The business groups warned that if fully implemented, the policies "will not only undermine the ability of European companies to participate in the IT market in China and to serve banks in general . . . but also hurt the development and integration of the Chinese banking sector in the global market".

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Last September the China Banking Regulatory Commission and Ministry of Industry and Information Technology issued new "guiding opinions" on "secure and controllable" information and communications technologies, which would affect banks' procurement of equipment including ATMs, point of sales terminals, smartcard readers and cash counters.

Multinational companies fear that the new rules, which have not been published in full, could begin to take effect as early as March 15. The CBRC and MIIT were not immediately available for comment.

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The European protest follows a similar appeal by more than a dozen US business lobbies this month to four US cabinet secretaries. The US letter requested the Obama administration's "immediate action" against the new rules.

"If fully implemented, these policies threaten the ability of US companies to participate in the $465 billion ICT market in China," the letter said. "Our companies' losses in turn will translate into decreased R&D investments in the US, harming US jobs and innovations."

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