E‐Business Law in China: Strengths and Weaknesses

Abstract

With 123 million Internet users, China represents a phenomenal potential market for e‐business. The astounding success of China in attracting foreign direct investment (FDI) can be partially explained by a series of reforms of policies, regulations, and laws. Can the introduction of China's new electronic signatures law produce the same results for e‐business in China? This paper analyses the electronic signatures law as a tool fashioned by Chinese lawmakers to encourage e‐business growth in China as they encouraged FDI. We find that China has created an electronic signature law that mirrors the open, flexible, and ever‐changing e‐environment. The fact that the law is not technology‐specific, but rather technology‐neutral, allowing for technological advances, is one of its strong points. A negative aspect of the law is its lack of a set guideline for identification requirements for purchasers of a reliable electronic signature, more commonly known as a digital signature, from electronic certification service providers. Despite the few negative aspects, the electronic signatures law should encourage the development of e‐business in China.

Keywords:

• e‐business
• China
• signature
• electronic signature
• security

Notes

1. Hong Kong and Macao are treated as separate entities by the Chinese government under a ‘one country, two systems’ approach (Cai 1999); therefore, when referring to China, this paper will exclude Hong Kong, Macao, and Taiwan.

2. In the context of digital signatures, the ‘electronic signature creation data’ will be the private key of the signatory.