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Microsoft and other U.S. companies reluctant, as China demands access to proprietary source code

It’s getting harder for American companies to do business in the East – the Russians have already started hitting Microsoft with bad news that turns worse soon enough, and now the Chinese government has passed a legislation forcing software companies, network equipment manufacturers, and other technology suppliers to disclose their full source code to prove that their code isn’t hackable or contains backdoors.

Of course, Microsoft – or anybody else for that matter – is not very happy with that; the legislation is passed, but only comes into effect in June of 2017. There’s still time for retaliation as a committee has been set up to decide the final regulations, and that’s what everyone is doing.

Microsoft China

In response to the new legislation, major corporations such as Microsoft, Intel, and IBM among others, have filed objections to the ‘Technical Committee 260’, that has been tasked with the challenge of building standards that comply with the upcoming regulations for operating systems, microprocessors, office software, and other software.

“Sharing source code in itself can’t prove the capability to be secure and controllable, it only proves there is source code,” says Microsoft, in a statement to the committee.

Microsoft’s comment is notable, as the company recently opened its third transparency center in Beijing, where Beijing officials can have a look at Microsoft’s source code – as long as they are willing to visit the premises.

Indeed, this was also mentioned in the statement made to the committee, as Microsoft suggested that being able to view the code at the Transparency Center should suffice, rather than sharing the full source code with the government.

Microsoft and Intel also demanded clarification about a security standard that gives a higher ranking to companies who can provide their services without being disrupted by “politics.”

Everyone’s in the same boat

The new legislation isn’t a targeted attack towards the U.S. technology industry – dozens of Chinese companies have also been affected. The companies, along with security experts and government agencies have been giving their inputs to the committee drafting the regulations.

It is unlikely that this would cause U.S. tech companies to pull out of the Chinese market altogether – but it remains a possibility, as the worst-case scenario.

Hopefully, as we get closer to June, details would become clearer than they are now.

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