China's vetting process will not be as clandestine as that of the United States. If the U.S. Government believes foreign products pose a threat to its national security, system of justice or public interests, these products are usually withdrawn from sale. But it remains impossible to verify if these products are indeed unsafe because the United States has declined to disclose any standards and procedures used for review and accepted no appeals in its review process.

In China, cybersecurity vetting will be supervised by the SIIO and conducted by the National Information Technology Standardization Technical Committee, and third-party professional testing institutions and experts will participate in the review process. The government will vet both imported and domestic products. New products will be able to freely enter the Chinese market only if they meet the country's cybersecurity standards.

That said, however, to ensure the cybersecurity of a country, using domestic products can avoid, to some extent, the backdoors that may threaten national security.

Market impact

China currently has the world's largest number of netizens. According to a report by the China Internet Network Information Center, by the end of 2013, China had more than 600 million netizens, 18.44 million domestic domain names and nearly 4 million websites. Among the world's top 10 Internet companies, three have their roots in China.

The cybersecurity vetting policy brings uncertainties to the $320-billion Internet technology market of the country.

The Chinese market is currently inhabited by famous international companies such as Cisco, IBM and Siemens, as well as domestic titans such as Huawei and ZTE. Since the vetting was announced, some Chinese listed IT software companies, such as China National Software and Service Co. Ltd., Inspur Electronic Information Industry Co. Ltd., Unisplendour Co. Ltd. and Beijing VRV Software Corp. Ltd., have seen their stock price rise.

Shen Changxiang, head of an expert group for the classified protection of national information security, said that vetting will guide research and development into IT, security and Internet products by China's state-owned and privately owned enterprises. With this policy, they will develop products conducive to national security and avoid those that may threaten national security. It is therefore foreseeable that clear orientations and technology strategies will encourage the industry to independently develop safe and reliable products.

In the aftermath of the PRISM incident, a perception exists in the Chinese market that use of foreign IT products is unsafe. Tang Lan, Deputy Director of the Institute of Information and Social Development Studies of the China Institute of Contemporary International Relations, said existing IT product certification systems are mostly voluntary rather than compulsory. After vetting commences, however, the country may establish other systems of classification for the protection of cybersecurity. Particular care will be accorded toward Internet backbone technologies in the financial, transportation and telecom sectors.

China's ban on Windows 8 may for civil service use give a glimpse into the vetting policy's potential impact on foreign IT products. Owing to safety concerns, China has banned the purchase and installation of Windows 8 across all of the desktops, laptops and tablet computers of Central Government departments. The country has instead opted to support homegrown operating systems.

Windows Vista, Windows 7 and Windows 8 by Microsoft are all based on tried-and-trusted computing technology. On the surface, this would make Microsoft appear a safe choice, but the U.S. giant has recently consolidated its control and surveillance of its users, hence the ban.

In 2006, Chinese computer producers Lenovo, Founder, Tongfang and TCL signed agreements to use official editions of the Windows operating system, paying $1.2 billion, $250 million, $120 million and $60 million, respectively. This represents only a fraction of the profits Microsoft annually gleans from the Chinese market.

It is unlikely foreign IT firms will readily acquiesce to the new demands. This raises the question of whether or not vetting will bring fresh woes to the Internet industry. Zeng said such worries are unfounded.

He said that human beings now live in an age of information in what is first and foremost an Internet-based society. The Internet by its very nature is open, but cannot be a place where people can simply do whatever they please. Instead, it is a place where users' rights and interests should be protected and this necessitates regulation. All the policies China has put forth are designed to regulate administration of the Internet and protect public interests, be they those of the state, companies or individuals.

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