Tech firms freak out as China erects barriers

Western companies are starting to freak out about moves by China that could prevent them supplying the country’s financial industry with technology.

Six groups representing European companies and banks have appealed for official help this week. They say China is breaking international trade rules.

That comes as Beijing is reported to be removing some of the world’s top tech brands from a list of approved central government suppliers.

China unveiled plans to regulate banking technology late last year. The rules, which are due to come into force next month, could require tech companies to share source code and other proprietary information with Beijing.

The European business lobby groups want the European Commission to help get the regulations suspended.

They say the policies would “hurt the development and integration of Chinese banking sector in the global market.”

“Combined with China’s recent other actions to tighten content filters and limit Internet-based services, these new policies will create an even more unwelcoming digital trade and investment environment for foreign companies,” the groups wrote in a letter to the European Commission.

A spokesperson said the European Commission is analyzing the Chinese measures and their potential impact.

“We are in regular contact with the Chinese authorities on trade matters and will certainly raise this issue,” the spokesperson said.

One of the authors of the letter — Business Europe director general Markus Beyrer — told CNNMoney his group was “particularly concerned about the potential for these measures to be applied to other sectors.”

Reuters reported Wednesday that China had removed Cisco, Apple, Citrix Systems and Intel’s security software provider McAfee from an approved procurement list.

These companies will now have to fight for contracts worth less than $80,000 that previously may have been awarded without a competitive process.

“Cisco is allowed to sell to all Chinese government, enterprise, and commercial customers. Any suggestion otherwise is false,” said a Cisco spokesman. “We have served our customers in China for more than 20 years, and we look forward to continuing to do so.”

The number of approved foreign brands dropped by one third last year, according to the Reuters report.

Relations with the U.S. have been strained by revelations from Edward Snowden that the government relies on American tech firms to spy on Chinese leaders.

The U.S. has repeatedly blocked Chinese telecom company Huawei from proposed acquisitions and partnerships — including a bid for 3Com and a supply deal with Sprint — because it accuses it of spying.

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