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 China said earlier this month work was ongoing on a draft
anti-terrorism law that would require foreign companies to hand over
encryption keys and otherwise facilitate Beijing's ability to bypass
security measures, despite U.S. protests.
"We have already made clear our concerns regarding forced technology
transfer and other attempts to bar technological competition, most
recently in the banking sector, and I look forward to further
discussion today," Lew said, in remarks made during a meeting with
Vice Premier Wang Yang in Beijing.
President Barack Obama said he had raised the issue directly with
China's President Xi Jinping, but Beijing denied U.S. statements
that the law had then been put on hold.
The policy, while applied to both domestic and foreign firms, is
seen largely benefiting domestic players, and foreign software firms
in particular risk sacrificing sales in other markets if it becomes
known that they have given Beijing back door access to their code.
Another regulation from China restricts the kinds of computers
purchased by the Chinese banking industry to ensure that they meet
"security and controllability" requirements, seen as a way of
effectively forcing Chinese banks to buy "indigenous" software
applications.
The U.S. government has complained of ongoing industrial espionage
by Chinese firms against its companies, saying it is often backed by
government agencies including the Chinese military. Beijing denies
the allegations.
Lew also said that the U.S. supported China's efforts to transform
its economy towards relying more on domestic demand, and looked
forward to China deepening its financial reforms, in particular in
its management of the exchange rate.
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"It is critical that China continues to move towards a
market-determined exchange rate and a more transparent exchange rate
policy," he said.
The meeting comes as the two sides prepare for the upcoming
bilateral Strategic and Economic Dialogue (S&ED), and vice premier
Wang referred to Xi's scheduled visit to the United States.
"I am looking forward to having a candid exchange of views with you
on these issues so that when President Xi Jinping visits the United
States in (the) autumn we will have a bumper harvest of China-U.S.
relations," Wang said.
Lew is scheduled to meet Premier Li Keqiang later on Monday.
(Reporting by Kevin Yao, and by Pete Sweeney in SHANGHAI; Editing by
Nicholas Heath, Richard Borsuk and Mike Collett-White)
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