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(Reuters) – China’s controversial anti-terrorism law could be passed as soon as the end of this month, state news agency Xinhua said on Monday, legislation that has drawn concern in Western capitals for its cyber provisions.

The draft law, which could require technology firms to install “backdoors” in products or to hand over sensitive information such as encryption keys to the government, has also been criticised by some Western business groups.

U.S. President Barack Obama has said that he had raised concern about the law directly with Chinese President Xi Jinping. The White House and U.S. State Department did not immediately respond on Monday to requests for comment on the latest development regarding the anti-terrorism law.

Xinhua said the law was having another reading at the latest session of the standing committee for China’s largely rubber stamp parliament, the National People’s Congress, which ends on Sunday.


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Officials at the meeting believe the draft for the law is “already quite mature” and have “suggested” it be put forward for approval, Xinhua said, without elaborating.

The initial draft, published by parliament late last year, requires companies to keep servers and user data within China, supply law enforcement authorities with communications records and censor terrorism-related Internet content.

China has said many Western governments, including the United States, have made similar requests for encryption keys, and Chinese companies operating in the United States had been subject to intense security checks.

Although the counter-terrorism provisions would apply to both domestic and foreign technologies, officials in Washington and Western business lobbies have argued the law, combined with new draft banking and insurance rules and a slew of anti-trust investigations, amount to unfair regulatory pressure targeting foreign companies.

Emery Simon, counselor at BSA The Software Alliance, a trade group representing IBM, Microsoft Corp and other tech firms, said the group has not seen a final draft of the bill, so it cannot determine whether the Chinese government included suggestions made by it or other industry representatives.

Without changes, he said, it “still presents serious concerns in terms of how security technology will be used and whether or not we’re going to have to do things in China that we have not been required to do in any other market.”

A representative for Apple Inc declined to comment on the proposed Chinese law but pointed to a submission the company made in response to an anti-terrorism bill in Britain that could place limits on encryption.

In the document, Apple defended its approach to encryption, saying, “We owe it to our customers to protect their personal data to the best of our ability. Increasingly stronger — not weaker — encryption is the best way to protect against” hacking and cyber-terrorism.

A new Chinese national security law, adopted in July, has as a core component a provision to make all key network infrastructure and information systems “secure and controllable”.

China is drafting the anti-terrorism law at a time when officials say it faces a growing threat from militants and separatists, especially in its unruly far Western region of Xinjiang.

Hundreds have died in violence in the past few years in Xinjiang. Beijing blames the trouble on Islamist militants.

Rights groups, though, doubt the existence of a cohesive militant group in Xinjiang and say the unrest mostly stems from anger among the region’s Muslim Uighur people over government restrictions on their religion and culture.

China denies abusing anyone’s rights in Xinjiang.

(Reporting by Ben Blanchard, David Brunnstrom in Washington, D.C., and Julia Love and Deborah M. Todd in San Francisco; Editing by Stephen R. Trousdale and Ken Wills)

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