June 13, 2017 By FTI Consulting
China’s first Cyber Security Law went live on June 1st and since launch, the wide-reaching law has been questioned by many multinational companies and individuals as being “extremely vague in language and exceptionally broad in scope”. In particular, restrictions on cross-border data flow and the tightening of online information and content have been placed under scrutiny. Further, a new requirement for companies is that all data relating to Chinese citizens or national security that is collected in China be stored on servers based in the country. To have this data transferred overseas, the company must submit a review from the Chinese regulators for permission. However, regulators will require access to computer program source codes during the review, which has raised fears that the State will be able to delve into companies’ intellectual property.
The latest crackdown on online content by the Chinese authorities comes amid a period of ideological and political tightening in the lead up to the 19th party congress. Not only will the new cybersecurity laws continue to restrict the freedom of speech and thoughts of Chinese citizens, they will also serve as a significant hurdle for multinational companies operating in China. Foreign companies will have to now deal with a range of additional costs and efforts to abide by the laws that require all data to be stored within China – this will also heavily favour domestic companies. The holy trinity of Chinese internet companies – Baidu, Alibaba and Tencent – all have aims to expand outside of China so will this form of protectionism actually help them innovate and compete on a global scale?
New research by Kantar found a growing number of China’s 700 million plus internet users acknowledge the potential negative impact on health from extensive use of social media platforms. 90 percent of those surveyed recognised online platforms like WeChat and Weibo could trigger “health and privacy concerns” such as the loss of concentration, but in spite of this, the majority of users have shown no intention of quitting. Citing positive impacts such as knowing what friends and family were up to, broadening general knowledge and understanding news and trends, mainland Chinese still seem to feel the benefits of participating heavily in social media outweighing any detrimental effects.
In a country where it’s common to see most people in public with their heads down and eyes glued on smartphones, the level of satisfaction they derive out of social media comes as no surprise. However, their admission that this addiction could be adversely impacting their health and personal lives, along with the apparent lack of interest in changing their habits as a result, are a bit more troubling. How long will the satisfaction with living a “better online life” negate the potentially damaging values that pervade some online channels? This switch in sentiment might already be starting as internet users in China are reportedly limiting their social media use. WeChat, China’s largest online platform, has even seen a slight decline in its penetration rate for 18-25 year olds.
Early June is usually known as a busy time for those involved with online monitoring in China. June 4th, in particular, saw internet controls tightened quite significantly, especially for foreign users of China’s largest microblogging site, Sina Weibo. “China’s Twitter” prevented all overseas users from uploading images and videos from June 3rd until June 5th. International users were also unable to change their personal details, such as their profile image or username, which had previously marked a way to show support for certain historical events in China. Officially, there was no ban — a “systems upgrade” was how the procedure was referenced by Weibo.
Attempts to prevent any potentially damaging details surfacing in China about historical events have had to become more refined thanks to the online world. In recent years as social media becomes more difficult to police, the state has put the onus on platforms themselves to monitor their users. Weibo, in particular, has been targeted by internet regulators in the past and has also been a primary target of China’s ‘real name’ rules which aim to make online commentators identifiable, and therefore, more accountable for their comments. These platforms are under immense pressure to cooperate with the state’s orders but they should also carefully consider their role in straddling the fine line between censorship attempts and the desire for free speech.
© 2017 FTI Consulting, Inc. All Rights Reserved.