China wants Silicon Valley’s encryption keys: Good business, or get out?

Summary:China wants the encryption keys from U.S. technology companies as part of a counter-terrorism law. The draft law leaves U.S. tech giants with two options: Play ball or get out.

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The Chinese government has introduced plans for a far-reaching counter-terrorism law that would require tech companies to hand over encryption keys and source code -- even "backdoors" to give Chinese authorities surveillance access, according to Reuters.

The draft law, on its second reading in the state's parliament, is expected to be passed in a matter of weeks.

In an interview with the news agency, President Obama said he has brought up the issue with the Chinese premier.

"We have made it very clear to them that this is something they are going to have to change if they are to do business with the United States," the president said.

Except that's not exactly what's going on here. It's U.S. tech companies that want to do business with China, thanks to its massive population, burgeoning economy, and its considerable potential financial returns. It's where some of the big global powerhouses are. It would be absurd to no longer do business in the economic and manufacturing heart of the world.

China's rules are broad and borderline terrifying for companies and countries wanting to do business with the Communist state. Making matters worse, tech companies can't possibly comply with the proposed rules. It's not surprising that China, with a history of stealing intellectual property, state-sponsored hacking, and shutting out businesses it doesn't like from state procurement rules, is not trusted by the West.

But Beijing, which sees the rules as vital in protecting state and business secrets, is the one holding the cards. Beijing doesn't trust Silicon Valley in the wake of the National Security Agency surveillance disclosures.

In that regard, China's move to introduce these laws is just good business sense for the country.

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China wants Silicon Valley's encryption keys: Good business, or get out?