China’s technology sector is growing much faster than China’s cybersecurity industry. The latter stimulus comes from both government policy enforcement and external threats, as exemplified in the US by ransomware attacks. This should strengthen local cybersecurity stocks that are being overlooked.

Beijing’s new cybersecurity program requires key industries like telecommunications to spend at least a tenth of their IT budget on cybersecurity over the next two years. The same applies to authorities and state-owned companies. Meanwhile, a new data protection law will come into force in September, creating a comprehensive legal framework for data use.

This push is part of a broader effort to tame the tech sector that previously grew by conscience. Denying access to Chinese data through espionage can be a bigger impetus than protecting the privacy of its citizens. Hacking with Increasing Costs This is another problem for the company.

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