Page 116 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
days and confiscated all his illegal income based on The crackdown comes amid an already worrisome
China’s Cyber Security Law, which came into effect on business environment for foreign companies in China.
June 1. The Nanjing case was not isolated. According to Nearly 80 percent of the 500 American companies
a court document posted on the official website of the operating in China said that the country’s web filters had
Supreme People’s Court in March, a 26-year-old man negative impact on business, according to a 2016 survey by
from Dongguan, Guangdong Province was sentenced the American Chamber of Commerce in China. European
to nine months’ jail with an additional 5,000 yuan fine and domestic companies in China, which rely on access
for providing software and tools to invade and illegally to business-critical information from abroad, which often
control the computer information system (Global Times). requires a VPN, are affected, says Lance Noble, Manager
The man was found guilty for the crime of “illegal control for Policy and Communications for the European Union
of a computer system” contained in Article 285 of China’s Chamber of Commerce in China. More than 20 percent
Criminal Law. The Criminal Law Article states: “Whoever of the 500 surveyed companies said that China’s Internet
violates state regulations and intrudes into computer restrictions cost them 10 percent or more of their annual
systems with information concerning state affairs, revenue in China (European Union Chamber).
construction of defense facilities, and sophisticated
science and technology is be sentenced to not more The Chamber found that 13 percent of survey
than three years of fixed-term imprisonment or criminal respondents had recently deferred investing more
detention.”The prosecution notice states that the man was in research and development (R&D) in China, or had
arrested in October of 2016 for setting up a .com website been unwilling to set up those operations here, since
earlier that year through which he offered two types of restrictions grew at the beginning of the year. “These
VPN software. Although the sentencing took place in worrying trends illustrate how excessive tightening of
January 2017, the news only surfaced on Chinese social Internet controls can choke business growth and stifle
media in September 2017. Many netizens questioned the investment in technology and R&D — areas which
severity of the punishment for selling a program to browse are crucial for China’s development,” said Jörg Wuttke,
the Internet. “The crime of wanting to know the truth and President of the Chamber. “This is compounded by the
selling a ladder,”one person said, referring to VPNs as a way fact that these measures are also discouraging much-
to “climb over” the Great Firewall of China (Barnes). needed foreign talent from relocating here.” Wuttke
added that it was in China’s interest to allow commercial
Moving Forward businesses to operate online. “This is not just a problem
for international business,” he said. “We know from
Using a VPN is legal in China. The legislation prevents extensive conversations with the Chinese public and the
VPN providers from legally operating in China without private sector that many domestic companies are just as
government approval. It does not affect VPN users in frustrated as our members.” “Anyone who does business
any legal way. According to Comparitech, most VPN in China has to always be mindful that China puts politics
providers do not have offices, employees, or servers on over money,” Dan Harries, a China Legal Specialist and
the mainland. That means they operate outside of the Founder of the Seattle-based law firm Harris Bricken, told
jurisdiction of Chinese authorities and do not require Quartz, “It may make economic sense for China to open
approval from the Chinese government to legally operate. up the internet, but politically, it believes it must close it
Still, the Great Firewall might target them for censorship even further, and so it has and will likely continue doing
if the government follows through on its threat. There is so” (Huang, Liu).
no precedent on record of anyone being arrested, fined,
or detained for using a VPN. Because VPN use in China Regardless of how likely the “cyber sovereignty”
is so widespread, especially among academics and initiative is to take place, even the possibility of greater
expatriates, this is unlikely to change. If you set up your VPN crackdowns is dire news for tech and international
iPhone or iPad from within China and connected it to the business workers and firms in China. VPNs are incredibly
Chinese App Store, however, you will likely be unable to important for companies trying to access global services
find or download the VPN you need. The solution to this outside of China. Information available on the global
is to change the location of your Apple accounts. To do Internet is a massive resource for most companies
this, however, you will need a form of payment native inside China. The consequences of losing such access
to another country. If you don’t have this, you can try would likely be so devastating to the economy that it
purchasing an iTunes gift card from another country and is improbable that the Chinese government follows
using that as a payment method (Bischoff ).
116
days and confiscated all his illegal income based on The crackdown comes amid an already worrisome
China’s Cyber Security Law, which came into effect on business environment for foreign companies in China.
June 1. The Nanjing case was not isolated. According to Nearly 80 percent of the 500 American companies
a court document posted on the official website of the operating in China said that the country’s web filters had
Supreme People’s Court in March, a 26-year-old man negative impact on business, according to a 2016 survey by
from Dongguan, Guangdong Province was sentenced the American Chamber of Commerce in China. European
to nine months’ jail with an additional 5,000 yuan fine and domestic companies in China, which rely on access
for providing software and tools to invade and illegally to business-critical information from abroad, which often
control the computer information system (Global Times). requires a VPN, are affected, says Lance Noble, Manager
The man was found guilty for the crime of “illegal control for Policy and Communications for the European Union
of a computer system” contained in Article 285 of China’s Chamber of Commerce in China. More than 20 percent
Criminal Law. The Criminal Law Article states: “Whoever of the 500 surveyed companies said that China’s Internet
violates state regulations and intrudes into computer restrictions cost them 10 percent or more of their annual
systems with information concerning state affairs, revenue in China (European Union Chamber).
construction of defense facilities, and sophisticated
science and technology is be sentenced to not more The Chamber found that 13 percent of survey
than three years of fixed-term imprisonment or criminal respondents had recently deferred investing more
detention.”The prosecution notice states that the man was in research and development (R&D) in China, or had
arrested in October of 2016 for setting up a .com website been unwilling to set up those operations here, since
earlier that year through which he offered two types of restrictions grew at the beginning of the year. “These
VPN software. Although the sentencing took place in worrying trends illustrate how excessive tightening of
January 2017, the news only surfaced on Chinese social Internet controls can choke business growth and stifle
media in September 2017. Many netizens questioned the investment in technology and R&D — areas which
severity of the punishment for selling a program to browse are crucial for China’s development,” said Jörg Wuttke,
the Internet. “The crime of wanting to know the truth and President of the Chamber. “This is compounded by the
selling a ladder,”one person said, referring to VPNs as a way fact that these measures are also discouraging much-
to “climb over” the Great Firewall of China (Barnes). needed foreign talent from relocating here.” Wuttke
added that it was in China’s interest to allow commercial
Moving Forward businesses to operate online. “This is not just a problem
for international business,” he said. “We know from
Using a VPN is legal in China. The legislation prevents extensive conversations with the Chinese public and the
VPN providers from legally operating in China without private sector that many domestic companies are just as
government approval. It does not affect VPN users in frustrated as our members.” “Anyone who does business
any legal way. According to Comparitech, most VPN in China has to always be mindful that China puts politics
providers do not have offices, employees, or servers on over money,” Dan Harries, a China Legal Specialist and
the mainland. That means they operate outside of the Founder of the Seattle-based law firm Harris Bricken, told
jurisdiction of Chinese authorities and do not require Quartz, “It may make economic sense for China to open
approval from the Chinese government to legally operate. up the internet, but politically, it believes it must close it
Still, the Great Firewall might target them for censorship even further, and so it has and will likely continue doing
if the government follows through on its threat. There is so” (Huang, Liu).
no precedent on record of anyone being arrested, fined,
or detained for using a VPN. Because VPN use in China Regardless of how likely the “cyber sovereignty”
is so widespread, especially among academics and initiative is to take place, even the possibility of greater
expatriates, this is unlikely to change. If you set up your VPN crackdowns is dire news for tech and international
iPhone or iPad from within China and connected it to the business workers and firms in China. VPNs are incredibly
Chinese App Store, however, you will likely be unable to important for companies trying to access global services
find or download the VPN you need. The solution to this outside of China. Information available on the global
is to change the location of your Apple accounts. To do Internet is a massive resource for most companies
this, however, you will need a form of payment native inside China. The consequences of losing such access
to another country. If you don’t have this, you can try would likely be so devastating to the economy that it
purchasing an iTunes gift card from another country and is improbable that the Chinese government follows
using that as a payment method (Bischoff ).
116
