U.S. law eyes government purchases of Chinese IT equipment

The law, which was signed this week by President Obama, prevents government organizations from making overseas IT purchases before obtaining approval from federal law enforcement agencies.

The U.S. government has decided that its agencies cannot buy IT equipment from overseas sources -- specifically China -- without approval from federal law enforcement.

The provision was tucked into a funding law signed this week by President Obama. The law requires that all federal agencies looking to buy IT equipment from companies overseas must undertake a formal "cyberespionage or sabotage" risk analysis with federal law enforcement. Once law-enforcement officials sign off, the purchase can be made.

The provision underscores the increasing concerns the U.S. appears to have with China. The assessment, in fact, must include "any risk associated with such system being produced, manufactured, or assembled by one or more entities that are owned, directed, or subsidized" by China, according to Reuters, which earlier reported on the law.

The impact on China could be great. According to Reuters, the U.S. imports $129 billion in "advanced technology products" from China. Not surprisingly, China is not pleased.

"This bill uses Internet security as an excuse to take discriminatory steps against Chinese companies. It is not beneficial to mutual trust between China and the United States nor to the development of trade and economic relations," Chinese foreign ministry spokesman Hong Lei told reporters today, according to Reuters.

The new provision comes just a month after the National Intelligence Estimate -- which the U.S. government will not confirm actually exists -- found that China has been the perpetrator of a sustained cyber-espionage campaign against the U.S. government. It's also believed that the U.S. is conducting cyber-espionage campaigns against the Chinese. So far, however, neither country has confirmed their activities.

Congress has also expressed its concerns with China. The House Intelligence Committee last year released a report on China-based companies Huawei Technologies and ZTE Corp., expressing concern that they might not be trustworthy. The Committee said that U.S. companies should not do business with Huawei or ZTE because of the possibility of Chinese government involvement.

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