A Japanese newspaper has reported that the Chinese government is planning to start asking firms wanting to export digital equipment into the country to give the government the source code for the product.

According to the report, if the company doesn’t give up the code when asked, they could be banned from manufacturing and/or selling their product in China.

An interesting step for a global super power just entering the world trade stage some might think.  The Chinese are calling this step “an obligatory accreditation system for IT security” and stating that the source code is needed to prevent computer viruses taking advantage of any vulnerabilities and to combat hackers.

Source code could be thought of as part of the intellectual property of the product so many are interested as to how China will implement this new system without infringing any IP laws.

So, if this new legislation does come in next May, how is it going to affect some of your large suppliers?

Will it effectively close off an avenue of cheap manufacturing? After all, it’s doubtful whether Mr Sony or Mr Microsoft will say, “okay here’s my source code”.

Will it mean prices rising for both business and consumer customers?