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European business lobby slams China's draft national security law

BEIJING (Reuters) - China’s draft National Security Law is excessively broad and would isolate the country from crucial technologies, a European business lobby said on Wednesday, in the latest backlash from foreign industry over a suite of pending Chinese regulations.

Provisions to tighten cybersecurity are core to the pending law, one of several moves Beijing has pursued after former National Security Agency contractor Edward Snowden disclosed that U.S. spy agencies planted code in American tech exports to snoop on overseas targets.

Other rules, including a draft anti-terrorism law, similarly call for the use of “secure and controllable” technology developed in China or which uses source code released to Chinese inspectors.

Those demands have riled foreign firms concerned about compromising intellectual property and losing market access.

“At present, the definitions ... are so extensive in both wording and scope that we are in effect looking at a massive national security overreach,” European Union Chamber of Commerce in China President Joerg Wuttke said in an emailed statement.

“Such vagueness creates a great deal of uncertainty for business, as it implicitly leaves the Chinese government with the option of undermining foreign market access based on unclear and broad national security considerations,” Wuttke said.

It is also “misaligned” with China’s commitments to improve investment conditions and risks cutting China off from “fundamental” foreign technologies, Wuttke said of the draft law, which could be adopted later this year.

The State Council Legislative Affairs Office could not immediately be reached for comment, outside office hours.

China says the new laws are critical to countering serious security risks from militant separatism to Internet hacking attacks.

President Xi Jinping, who heads a newly established national security commission, has said China’s security covers areas from politics and culture to the military, the economy, technology and the environment.

During a second reading of the National Security Law in April, China’s legislature said it would deal with a range of risks, including “harmful moral standards”.

The new batch of legislation pushed by Xi’s administration, which also includes a law regulating foreign non-government bodies, has drawn a storm of criticism from foreign governments and business and civil society groups.

The drafts coincide with a crackdown on dissent, as the government has detained and jailed activists and blamed “foreign forces”, including foreign NGOs, for the pro-democracy protests in Hong Kong last year.

Reporting by Michael Martina; Editing by Clarence Fernandez