Chamber: China's cybersecurity laws could cost trillions

Chamber: China's cybersecurity laws could cost trillions
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A U.S. Chamber of Commerce study released Friday shows that China’s emerging national security regime, which decreases access to the technology market, could have a drastic impact on its economy.

The business advocacy group’s report warns other countries, including the United States, European Union and Russia, that they risk similar outcomes from such policies. 


“China is a test case for exploring the welfare costs of a digital divorce: regardless of the motivations or even the feasibility, policymakers and citizens in China and elsewhere would benefit from understanding the price tag,” reads a more detailed economic analysis document released alongside the report. 

The study, “Preventing Deglobalization,” posits China shortchange its gross domestic product between 1.77 percent and 3.44 percent a year — worth over $200 billion a year. By 2025, that could grow to a low-end estimate of $3 trillion. 

“Nevertheless, many countries — China, Russia, India, Brazil, several European nations and the EU itself, and even, in some instances, the United States (among others) — have considered, are pursuing or have adopted laws and policies that risk balkanizing the industry, without regard for their domestic — let alone the global — welfare implications,” reads the report.

In recent years, countries including China and Russia have enacted policies requiring cloud-computing companies to host data within national boarders, with the hopes of keeping data and records within law enforcement jurisdiction. 

China is also considering a new law that would provide increased regulatory hurdles for foreign information security products to establish they are secure from foreign governmental eavesdropping. The Cybersecurity Law, wildly unpopular in the international technology community, is usually seen as a response to concerns raised by documents released by NSA leaker Edward Snowden.