China pushes back against new IT sourcing rules

China is unhappy with new provisions in U.S. law that put new restrictions on four federal agencies' ability to acquire IT equipment from the nation.

The law sends the wrong signal, and will affect trade and business relations between Chinese IT companies and their American partners, said a spokesperson for China's Ministry of Commerce, as quoted in state-run news outlet Xinhua.

The new rules, which apply to NASA, the Commerce and Justice departments and the National Science Foundation, were signed into law on March 28, as a small provision in the continuing resolution to keep the U.S. government open through the current fiscal year.

It's not clear what China could do to protest the move. Stewart Baker, a national security lawyer and former senior official in the Department of Homeland Security noted on the legal blog the Volokh Conspiracy, that China could try to protest the move with the World Trade Organization. Baker wrote that any case China tries to make on these grounds could be weakened by China's status as an observer and not a signatory to the WTO's government procurement agreement, and because the U.S. rules apply to "purchase from Chinese-government-influenced entities, no matter where these entities manufacture their products."

So far, the affected agencies haven't disclosed how they plan to cope with the changes in IT acquisition.