China on Thursday launched a controversial cybersecurity law, claiming to ensure its national security, amid criticism from foreign companies which say it might hamper their operations.
The new legislation came into force on Thursday, provoking criticism and posing uncertainty among the business sector in the country, Efe news reported.
"The law will have a big impact on how business is done in China," said Michael Chang, vice-president of the European Union Chamber of Commerce in a news conference on 30 May, adding that there are still many issues to be resolved.
An article in the cybersecurity law orders "key information-infrastructure operators" to store their data in China, a policy which is considered to have an affect on the data flow on the internet and between companies.
According to the law, all companies must undergo a "safety assessment" procedure if they want to transfer these data out of China.
In a statement issued on 31 May, authorities tried to downplay the situation, saying the legislation "does not restrict foreign companies or their technology and products from entering the Chinese market, nor does it limit an orderly, free flow of data in accordance with the law,"
The law is designed to safeguard China's cyberspace sovereignty, national security, public interest, as well as the rights and interests of citizens, legal persons and other organisations, according to the Cyberspace Administration of China (CAC).
The organisation added that in the real world, every business or individual should respect the law of the country where they operate in, and cyberspace should not be an exception.
The legislation has also sparked criticism from human rights organisations as it also demands that internet service providers tighten controls over the information posted by their users and stop the flow of information that is considered "illegal" by the authority.
The NGO believed that this legislation would lead internet companies to becoming "accomplices to censorship" in one of the most controlled networks in the world.