China passed a controversial cybersecurity law Monday that critics say could hamper technology companies based outside of China from doing business in the country, according to Bloomberg.
Tech companies say the new law could require them to turn over intellectual property or create back doors in products.
The Cyber Security Law will take effect in June, government officials said.
China says it’s simply looking to better protect itself from hacking and cybercrime, but the new law has generated significant concern from foreign tech businesses because it requires companies to store business info and data on Chinese citizens locally and not be transferred abroad without permission.
The law also requires companies to give government investigators full access to their data if suspected of any misconduct.
Foreign tech companies say the law gives Chinese-based companies the advantage. Gartner has valued the Chinese IT market at $340 billion. But Zhao Zeliang, director-general of the bureau of cybersecurity for the Cyberspace Administration of China, said the purpose of the new law is to safeguard national security, not to reduce trade in China.