China mulls technology security system to counter US pressure on its high-tech firms

The initiative is expected to protect its high-tech firms and would provide the legal basis for technology exports management

China has announced plans to set up a national technology security management list system in a bid to protect its high-tech firms from being arbitrarily targeted by the US in the wake of the intensified trade war between the two countries, official media here reported.

The move comes after the US issued a ban on Chinese telecom giant Huawei’s 5G services, warning other nations that the company’s systems could be manipulated by Beijing to spy on other countries and disrupt critical communications.

Some countries, including Australia and New Zealand, have blocked Huawei from supplying equipment for 5G mobile networks.

The National Development and Reform Commission, which is China’s top planning body has been tasked with organising a study on establishing a national technological security management list system, state-run Xinhua news agency reported on Saturday.

The move, which is taken according to the National Security Law and other related laws and regulations, aims to “more effectively forestall and defuse national security risks,” the commission said.

While the detailed measures will be unveiled in the near future, an article in the state-run Global Times- Technological security management list system is a move to counter US suppression – stated the plan is related to the recent announcement by the Ministry of Commerce to work out a non-reliable entity list of foreign companies and individuals who could harm high tech Chinese firms.

It not only is an initiative for China to strengthen its long-term institutional construction of economic security, but also has practical significance for countering the US technical restrictions and supply cut-off to some Chinese high-tech enterprises like Huawei, the Global Times report said.

The initiative, expected to protect Chinese high-tech enterprises, will provide the legal basis for technology exports management, it said.

Rare earth metals export ban

China has recently indicated to halt the export of rare earth metals to the US in an intensified trade war between the two countries. The metals are key components for host of advanced technologies like iPhones and hi-tech missile guidance systems.

China not only is the world’s largest producer and exporter of rare earths, but also masters rare-earth refining technology ahead of the world, the report said.

Since 2018, the US has repeatedly drawn on its domestic law to exert pressure on Chinese high-tech enterprises including Huawei, it said.

Huawei is caught in the intensifying trade war between China and the US after President Donald Trump imposed tariffs on USD 200 billion on Chinese goods, prompting Beijing to hike duties on USD 60 billion in American products. The dispute has snowballed into a tech war with the US urging nations to shun the company in 5G networks.

The concerns have escalated as Huawei has risen to become the world leader in telecom networking equipment and one of the top smartphone manufacturers alongside Samsung and Apple.