In the news recently, there's been quite a bit of fear about hacking and data theft sponsored by foreign governments (usually China, but there's been some fear about North Korea and other nations as well). Here's an example that may or may not have been connected to a foreign intelligence agency, and here is a more recent information stealing attack on government targets. There's legitimate fear here, governments have wide resources that they can (and likely do employ) for electronic espionage. Foreign and domestic companies are also known to employ industrial espionage (electronic and old-fashioned) to steal valuable data from their competitors. As a result, governments and corporations are beginning to take foreign threats seriously and look at the ways they're vulnerable to foreign threats.
Unfortunately, the major espionage fear (corporate and government) is the same country that provides so much of our hardware and has significant government control over their corporations ... China. We don't know what they might be putting into the hardware that we buy from them, which is a serious threat.
Although that's perfectly true, China buys lots of software (security software included) from the US. Given that the US and China are global competitors, they have as much to fear from US espionage as we have to fear from theirs. As a result, it was inevitable that China would take action to prevent foreign security software from being used to secure their critical infrastructure. It's perfectly reasonable, and I think this exact concern would prevent Chinese-programmed security software from being widely used in the West.
At the same time, there are some claims of protectionism and fear that China is trying to shut foreign competition out of a major Chinese market. This is also true, favoring local companies clearly goes against "free trade" principles and certainly the Chinese computer security market would hugely benefit from forcing foreign companies out or forcing them to work alongside local Chinese companies.
There's really no easy answer to this one, but really there never seems to be. To keep free trade, you need to allow foreign companies in. To keep security, you need to keep untrusted companies out. China's trying to draw a line here by only banning foreign computer security products from critical infrastructure. They're just as afraid of the US hacking their electrical grid as we are of them hacking ours.
I'm most interested in the parallel reaction to the same threat by our countries. Information security seems to be shaping up into the great leveler of nations. It doesn't matter if your military budget is $880 billion (US), $78 billion (PRC) or the much smaller budget of any other country. To the hacker, we're all vulnerable.
But that's just my opinion, I could be wrong. What do you think, is China overreacting? Do you think the situation with China is fundamentally different than the situation in the US?