China's Cyber Policy

The U.S. - China strategic and economic dialogue held in early June yielded more than 300 results covering a wide range of economic reforms, investments, financial market regulations, monetary policy, information on energy reserves, and so on. Beijing and Washington also discussed cyber security, which is one of the most crucial and controversial issues between the two governments. This article will attempt to analyze the situation and development of the Chinese internet economy against the background of the One Road One Belt Initiative as well as the impact exerted by the draft cyber security law.

The era of the Internet economy in China

The internet economy has been flourishing in China. Statistics show that the total number of netizens in China has reached 7 million, and the rate of companies conducting online purchases and sales is around 22.8% and 24.7%. Moreover, 24.2% of Chinese companies have been using the Internet to carry out marketing activities and promote business proportion. National online retail sales reached the sum of 3.8773 trillion yuan in 2015. 

The impressive achievements of the Chinese internet economy were made possible due to a whole package of governmental policies. Specifically, in 2015 the Chinese government launched the “Internet +” campaign, which marked a new level of the integration of industrialization and informatization. Internet+medication, internet+transportation, internet+public service, internet+education and various other fields are to be developed under this national internet economy campaign which will profoundly transform the whole economy by the way companies carry out their business.

The Chinese One Belt One Road initiative has also provided new impetus for the development of the internet economy. The construction of the information harbor of the One Belt One Road initiative put forward in 2014 was an upgraded version of the Chinese-ASEAN information harbor, which aims to construct an information “highway” and boost information sharing so that a favorable environment for promoting this Chinese national initiative can be created. “Vision and actions on jointly building silk road” clearly stated the necessity of “strengthening international media cooperation, and actively utilizing the internet as a platform for a harmonious and friendly cultural environment to be built”. The rapid construction of information infrastructure provides Chinese internet companies with the opportunity to expand their international layout, leading them to the crucial point of strategic adjustments. In fact, some Chinese leading internet companies have already expanded their overseas market. As early as 2006, Baidu entered the Japanese market and also promoted its search engine in Vietnam, Malaysia, Brazil and several other countries. The Ali group has also enlarged its scale and influence overseas through investments, mergers and acquisitions. Chinese internet companies are thus embracing a momentous era of improving their competitiveness and expanding their market with governmental support on their way towards the global scale. On the other hand, the government is permeating the concept of the New Silk Road initiative with precisely this successfully expansion of Chinese internet companies.

New regulation: the draft cyber security law

As stated above, the unprecedented development of the internet economy makes China ahead of the curve in the competition of the global economy. Not surprisingly, it has also brought many concerns to the government’s attention. Beijing realizes both the unparalleled advantages of fully utilizing internet as well as the dangerous outcome that can result from inadequate governance of the internet. President Xi pointed out that “millions of netizens who acquire and exchange online information are bound to be greatly affected in terms of knowledge forming, logical thinking and values, especially their opinions towards life, society and their state”. Thus the regulation of cyber security in China is not only an issue of economy security, but also an issue of political and ideological security for the CCP.

The draft cyber security law was released in July 2015, which was the first step towards legalizing internet regulation in China. A core concept clarified in this draft law is the term “cyber sovereignty.” This underlines the fundamental position of the Chinese government on cyber policy both internally and externally. As pointed out by the director of the College of Information Security Research of China, Zuo Xiaodong, “cyber sovereignty is the manifestation and extension of state sovereignty in cyberspace. The principle of cyber sovereignty is fundamental guidance in protecting national security and interests, as well as participating in international cooperation in cyberspace”. In addition to the notion of cyber sovereignty, the draft law emphasizes that the government has the legal right to ask an internet server to cease internet service for a certain period of time when social security is concerned, which was already put into practice when ethnic conflicts took place in China’s southern region. Some opinions maintain that the draft law has not produced anything new, but has only legalized the rights which were already utilized by the Cyberspace Administration of China.

On the other hand, foreign companies have strongly opposed the draft law, which will probably cost them huge losses in the Chinese market due to strict regulations on technical admissions, industrial standards, and data storage regulations as enshrined in the draft law. As criticized by the expert from the Research Center of Cyber Crime and Security of China’s Renmin University, Xie Junze, the overwhelming length of state control and the obligations of citizens have left little space for the protection of the rights of citizens, legal entities, and organizations to utilize the internet. It thus appears that this law is more of a regulation from the state’s standpoint than a law meant to establish a balance between rights and obligations.

China’s guiding principles of international relations in cyberspace

China is attempting to regulate international norms and principles of international relations in cyberspace. In May 2015, China and Russia signed an agreement on international security cooperation which promised that the two states would not conduct cyber attacks against each other. Beijing and Moscow have expressed their shared concern over threats of computer technology being used to undermine national sovereignty and interfere in domestic affairs. Russia shares a lot of similarities regarding internet governance with China insofar as they both hold the opinion that the U.S does not have the right to determine a global system of internet governance to be regulated in the framework of the UN through international organizations such as the International Electronics Telecommunication Union and the International Organization for Standardization. Thus there are reasons to believe that China and Russia will establish a new approach to cooperating in the field of cyber security, which yields the opportunity for fair discussions while taking national interests into consideration.

After the launch of the draft law in July 2015, President Xi made a visit to Washington in September. Later in the year, the First U.S.-China High-Level Joint Dialogue On Cybercrime And Related Issues was held in December, during which the two sides agreed upon the document, “Guidelines for combating cybercrime and related issues”, which established guidelines for requesting assistance in combatting cyber crimes and other malicious cyber activities and responding to such requests. The second such dialogue took place on June 14th, 2016 in Beijing. Nevertheless, the essential divergence between the two sides is unlikely to subside even though the cooperation of the two great powers possesses great significance for global internet governance just like their bilateral cooperation in other fields.

By its attempts to lead the formation and reform of new, global internet governance through bilateral agreements with partner states like Russia, as well as through multilateral mechanisms including the Shanghai Cooperation Organization, China is applying many of its fundamental principles in international relations to the field of cyber security. The Chinese model of internet governance and its cyber security law might still be heavily criticized by Western countries in the long term, but in the end this is a journey seeking cooperation and thus the beginning of potential consensus. As pointed out by President Xi at the World Internet Forum last year, “the international community should strengthen cooperation and promote dialogue on combatting cyber terrorism based on mutual respect and mutual trust, as well as promote reform of global internet governance.”