For better or for worse, Chinese technology companies have been having a hard time making inroads in North America. While lack of innovation can be cited for their failure in the consumer market, fear of Chinese cyber-espionage can be blamed for their inability to enter the commercial and governmental markets. And that fear has just materialized into law courtesy a new bill passed by US Congress.

You may have heard about the tussle going on in the United States government about governmental spending. Recently, Congress just agreed upon a bill that would allow the US government to avoid sequestration (aka automatic spending cuts) and continue to operate as normal until this September. Hidden away inside that bill is a provision that dictates all technology purchased by US Department of Justice, US Department of Commerce, and NASA must first be vetted by law enforcement.

Specifically, law enforcement can only give the green light on a purchase after assessing the risk of “cyber-espionage or sabotage” and “any risk associated with such system being produced, manufactured or assembled by one or more entities that are owned, directed or subsidized by China”. This includes tech (hardware and software) sold directly by Chinese companies and Chinese technology resold by non-Chinese companies.

Previously the US government — more specifically, the US House of Representatives — voiced concerns regarding Huawei’s and ZTE’s (two Chinese tech companies) involvement in building the infrastructure for American telecoms, due to influence by the Chinese military and government. However, this is the first time something like this has been made law.

As experts point out, not only is this a direct blow to Chinese infrastructure companies looking to expand into North America (aka Huawei and ZTE), but is a big blow to consumer and business facing companies like Lenovo, too. Of course this bill does not mean zero Chinese tech can be purchased by the US government; the bill just makes it significantly harder for Chinese companies to convince elements of the American government to purchase their products.

21st century version of McCarthyism or something that is justified in the face of recent cyber attacks allegedly conducted by people inside China? You tell us.

[via Reuters]