The move comes as part of China's new anti-terrorism law, which would require firms to keep data about their users inside China, hand over encryption keys and delete terrorism-related content. Worse than that, however, is that it would force companies like Google, Microsoft and Apple to poke holes in their software so that local surveillance agencies could spy on their citizens.
Ever since Edward Snowden revealed details about the NSA's PRISM program, plenty of foreign powers have been wary of America's biggest tech firms. China itself has attacked various products from Microsoft, IBM, Kaspersky, Symantec, Apple, Facebook and Google, holding each one responsible for espionage-related crimes. Some in Washington, however, believe that the move is simply China's way of handing favorable conditions to homegrown businesses in response to the popularity of western brands in the land.
Of course, the US can't occupy the moral high ground in this instance, since the country's security services have overstepped the mark on more than one occasion. It's not as if these agencies have learned their lesson, either, since the FBI is still demanding that Apple and Google hand over the encryption keys to its devices, even if there's no evidence that encrypted data hurts investigations.