U.S.-China business group criticizes cybersecurity law

As Gov. Jerry Brown visits China this week on a week-long trade mission, a U.S.-China business group said Monday that cybersecurity laws unfairly target Chinese firms, causing the U.S. to miss out on foreign investment.

The U.S.-China Business Council criticized current law that requires purchases of information technology systems from China to undergo a review process.

The process is intended to assess whether such a purchase by U.S. government agencies would make the U.S. vulnerable to a cyber attack.

The law is unnecessary and discriminates against Chinese firms, said the group’s president, John Frisbie.

“The national security of the United States is critical, but it must not be used as a means of protectionism,” Frisbie said.

“Imposing a country-specific risk assessment creates a false sense of security if the goal is to improve our nation’s cybersecurity,” he said.

In a letter to Congress, Frisbie urged that lawmakers not include similar legislation in future appropriations bills.

Frisbie’s appeal comes the week that Brown is in China on a trade mission. Brown will attend the opening of a California trade office in Shanghai, part of an effort by the state to bolster the amount of foreign investment from that country. Chinese investors pumped $1.3 billion into California in 2011, according to an Asia Society report.

The Times’ Anthony York writes that California is eager to court even more Chinese investment at a time the federal government is sending mixed signals.

Last year, the Obama administration blocked an attempt by a Chinese company to acquire four Oregon wind farms, citing national security concerns. An October report from the House Intelligence Committee said U.S. companies should not do business with Chinese telecom firms, suggesting such deals could put U.S. customer data in the hands of Chinese officials.

But an October report released by the Asia Society said security concerns can be misapplied in situations where there is no credible security threat.

“Chinese investment raises plenty of normal, legitimate concerns given the general considerations around foreign ownership and the special characteristics of China,” the report said. “However, security concerns can be misapplied in situations that present no real threat because of simple overreaction or -- more worrying -- as a back-door route to stifle competition.”

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ricardo.lopez2@latimes.com