China Eases Restrictions on Foreign Cryptography Products

China’s National People’s Congress has liberalized the regulation of commercial cryptography and forbidden forced technology transfers for those products.

The move may create an opening for foreign cryptography firms to enter the Chinese market, and may ease data privacy concerns among multinational companies doing business there.

The new law will create “opportunities for foreign companies to participate in the sector,” Paul McKenzie, managing partner of Morrison Foerster LLP’s Beijing and Shanghai offices, said in an email.

China currently prohibits the sale or use of foreign cryptography products without approval from the State Cryptography Administration. The new law, which takes effect...