China setting up system to ensure 'national security' in tech

The US Commerce Department placed Huawei on an "entity list" on the grounds of national security on May 16, a move that curbs its access to US-made components it needs for its equipment.
The US Commerce Department placed Huawei on an "entity list" on the grounds of national security on May 16, a move that curbs its access to US-made components it needs for its equipment.PHOTO: AFP

BEIJING • China plans to establish a system to ensure "national security" in technology, state media reported yesterday, amid an expanding trade war with the US that has snared Chinese tech titan Huawei.

China's top economic planning agency, the National Development and Reform Commission (NDRC), has been tasked with establishing a list system to "more effectively forestall and defuse national security risks", the official Xinhua news agency reported, adding that "detailed measures will be unveiled in the near future".

Washington and Beijing resumed their trade battle last month when trade talks in the United States ended without a deal and US President Donald Trump raised tariffs on US$200 billion (S$272 billion) in Chinese goods, which Beijing retaliated to with its own tariff hike on billions worth of US goods.

The trade war has stepped up in recent weeks with Washington's move to blacklist Huawei.

The US Commerce Department placed Huawei on an "entity list" on the grounds of national security on May 16, a move that curbs its access to US-made components it needs for its equipment. A 90-day reprieve was later issued.

"Based on what I know, China is building a management mechanism to protect China's key technologies," Mr Hu Xijin, editor of the nationalistic state-run tabloid Global Times said yesterday on Twitter.

"This is a major step to improve its system, and also a move to counter the US crackdown. Once taking effect, some technology exports to the US will be subject to the control," he added.

 
 
 
 

The Chinese government has also summoned major tech firms from the US and elsewhere to warn that they could face dire consequences if they cooperate with the Trump administration's ban on sales of key American technology to Chinese companies, according to people familiar with the meetings.

Held on Tuesday and Wednesday, the meetings came soon after Beijing's announcement that it was assembling a list of "unreliable" companies and individuals.

That list was widely seen as a way of hitting back at the Trump administration for its decision on Huawei.

The meetings last week were led by the NDRC, and attended by representatives from the Ministry of Commerce and Ministry of Industry and Information Technology, who addressed their remarks to a broad range of firms that export goods to China, two sources said.

The involvement of three government bodies suggested a high level of coordination and likely approval from the very top of China's leadership structure.

Mr Paul Triolo, head of geo-technology at consultancy Eurasia Group, said the trade spat had major political implications for Chinese President Xi Jinping.

"Mr Xi and the party will be seen as unable to defend China's economic future" if the confrontation with the US does major damage to Huawei and throws off China's roll-out of the next generation of 5G wireless technology, he said.

 
A version of this article appeared in the print edition of The Sunday Times on June 09, 2019, with the headline 'China setting up system to ensure 'national security' in tech'. Print Edition | Subscribe