China’s Leaders Take Aim at Internet Security

China’s Leaders Take Aim at Internet Security

Xi, Other Top Communist Party Officials to Helm New Committee

PAUL MOZUR

Updated Feb. 27, 2014 11:04 a.m. ET

BEIJING—China’s government appears to be tightening its grip on online discourse with the formation of an Internet-security committee led by top Communist Party officials.

The official China Central Television said the group was set up to address a growing number of cyberattacks and other Internet security issues, and will work to turn the country into a “global Internet power” and promote socialist values.

“Doing a good job guiding public opinion is a long-term mission,” CCTV quoted Chinese President Xi Jinping as saying. “It requires innovative Internet propaganda, Internet broadcasting discipline.”

Mr. Xi presided over the first meeting of the committee, the Central Internet Security and Information Leading Group. The deputy heads of the group include the party’s No. 2 official, Premier Li Keqiang and a top party official for propaganda, Liu Yunshan.

The membership indicates the committee will wield considerable power over the world’s largest Internet market by users.

Mr. Xi’s presence “reflects China’s response to ongoing criticism that its activities in this space aren’t especially organized and consistent with other governments around the world trying to bring greater coherence to this policy realm,” said Jimmy Goodrich, director of global policy at the Information Technology Industry Council, an industry group. “With Xi in charge, he can certainly claim that’s not true anymore.”

Chinese officials have said they were forming the committee to respond to rising global concerns about cyberspying. Nearly a year ago, U.S. officials said they were considering countermeasures to address what they called a ramp-up in China’s cyberspying.

The official media reports Thursday about the committee cited details of U.S. cyberspying activities revealed by Edward Snowden, the former National Security Agency contractor.

China has long maintained it is a victim of cyberattacks. The CCTV report said Mr. Snowden’s revelations “highlighted the dilemmas of ensuring Internet security.”

The creation of the committee appears to be the latest effort by the government to crack down on social media. Late last year, Beijing warned and punished a number of prominent Chinese social-media commentators, a move critics say was aimed at quashing dissent and the discussion of sensitive topics online.

The Chinese Communist Party said in November the Internet poses a “new, comprehensive challenge” to the country’s stability. The government’s management of information flows online have lagged behind “the rapid growth of social networking and instant communication tools…which disseminate information rapidly, have a large influence and broad coverage and have a strong ability to mobilize society,” it added.

Cybersecurity concerns have been a major hurdle for foreign companies trying to sell technology in the lucrative Chinese market. Last year, Qualcomm Inc. QCOM +0.19% ‘s chief executive said U.S. restrictions on Chinese companies and NSA surveillance were affecting the company’s business in China. Adam Segal, a senior fellow at the Council on Foreign Relations, said China has “made it clear consistently that they want Chinese companies producing these technologies.”

Following the admission, China’s National Development and Reform Commission said it had begun an antimonopoly probe aimed at the chip maker. Qualcomm has said it isn’t aware of any activity that violates China’s antimonopoly law and will continue to cooperate with the NDRC, which partly oversees antitrust issues.

Late last year Cisco Systems Inc. Chief Executive John Chambers also said the company faced difficulties selling into China. When asked on an earnings call late last year whether the storm around NSA surveillance was hampering China business, Mr. Chambers said “it is an impact in China.” Rob Lloyd, Cisco’s president of development and sales, said the government tension was causing customers to pause.

He added, “it’s not going to get worse but it’s not going to get better” for foreign firms.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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