Analysts point out that further efforts to block them could disrupt critical services for US businesses.
“The downsizing of Chinese telecommunications companies may impact the efficiency of American businesses’ data management and global communications by reducing competitive options and increasing switching costs,” said Prabhu Ram, head of the Industrial Intelligence Group at CyberMedia Research. “Businesses must prioritize due diligence, strong contractual agreements, and strict compliance with data protection laws to minimize potential data security risks. Businesses should also consider diversifying their suppliers and adapting their compliance strategies to effectively deal with the growing US-China tech tensions. “
Reinforcement controls
The US government has stepped up efforts in recent years to limit China’s access to data and technology, citing security concerns. Earlier this year, the US Department of Defense released a new list of Chinese companies, which are said to have ties to the country’s military.
The latest actions can be seen as a clear indication that the current US administration will continue to create obstacles for Chinese companies accessing sensitive data to conduct business in the US, directly or indirectly.
“Although the current and additional controls proposed by regulators may cause some customers of these services to lose access, it is the right way to try to consolidate networks and reduce potential risks,” said Daniel Newman, senior analyst at Futurum Research. “And while the harsh conditions of this law may leave companies operating in good faith in a difficult situation, the US must make decisions based on what it sees as the best – for now there must be risk taking.” likely as US-China tensions remain high and will remain high for the foreseeable future. “
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