Controversial China Anti-Terror Law Looks Set To Pass This Month

BEIJING (Reuters) - China's controversial anti-terrorism law could be passed as soon as the end of this month, state news agency Xinhua said on Monday, legislation that has drawn concern in Western capitals for its cyber provisions.

The draft law, which could require technology firms to install "backdoors" in products or hand over sensitive information such as encryption keys to the government, has also been criticized by some Western business groups.

U.S. President Barack Obama has said that he had raised concern about the law directly with Chinese President Xi Jinping.

Xinhua said the law was having another reading at the latest session of the standing committee for China's largely rubber stamp parliament, the National People's Congress, which ends on Sunday.

Officials at the meeting believe the draft for the law is "already quite mature" and have "suggested" it be put forward for approval, Xinhua said, without elaborating.

The initial draft, published by parliament late last year, requires companies to keep servers and user data within China, supply law enforcement authorities with communications records and censor terrorism-related Internet content.

China has said many Western governments, including the United States, have made similar requests for encryption keys, and Chinese companies operating in the United States had been subject to intense security checks.

Although the counter-terrorism provisions would apply to both domestic and foreign technologies, officials in Washington and Western business lobbies have argued the law, combined with new draft banking and insurance rules and a slew of anti-trust investigations, amount to unfair regulatory pressure targeting foreign companies.

A new national security law, adopted in July, has as a core component a provision to make all key network infrastructure and information systems "secure and controllable".

China is drafting the anti-terrorism law at a time when officials say it faces a growing threat from militants and separatists, especially in its unruly far Western region of Xinjiang.

Hundreds have died in violence in the past few years in Xinjiang. Beijing blames the trouble on Islamist militants.

Rights groups, though, doubt the existence of a cohesive militant group in Xinjiang and say the unrest mostly stems from anger among the region's Muslim Uighur people over government restrictions on their religion and culture.

China denies abusing anybody's rights in Xinjiang.