Cyber security Photo: IC

China's top internet regulator announced on Thursday that it has launched a cybersecurity review into products sold by US-based Palo Alto Networks in the country, a step that Chinese analysts said was necessary for national security as Washington increasingly engages in cyber activities seen as threatening national interests.

According to a statement from the Office of the Central Cyberspace Affairs Commission (CCAC), the move aims to protect the safe and stable operation of critical information infrastructure, prevent cybersecurity vulnerabilities and risks, and safeguard national security.

The review is being conducted by the Cybersecurity Review Office in accordance with the National Security Law, the Cybersecurity Law, and the Cybersecurity Review Measures of China, according to the CCAC statement.

The move came just a day after China's Ministry of Commerce (MOFCOM) announced a string of swift and decisive countermeasures in response to the continued US escalation of unilateral protectionist moves targeting Chinese businesses and products, stating that the US seriously violates the important consensus reached by the two heads of state and severely damages China's legitimate rights and interests.

Following the announcement, shares of the US cybersecurity firm opened on Thursday more than 1.6 percent lower.

Although little is known so far about Palo Alto Networks' specific practices, the core rationale for this type of review typically centers on possible cybersecurity loopholes, Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Thursday. 

"If any foreign firm operating in China endangers critical network infrastructure or presents a genuine risk, it is both lawful and justifiable for regulators to conduct the necessary inquiries, especially for a foreign provider operating in such a sensitive industry," Zhou said. 

Conducting a cybersecurity review of Palo Alto Networks is a necessary measure to safeguard national security, rather than merely a countermeasure amid bilateral economic and trade frictions with the US, Qin An, director of the Internet Policy and Law Research Center under the Law School in Tianjin University, told the Global Times on Thursday.

"The move carries added significance given Washington's history of cyber penetration and strategic pre-positioning aimed at undermining China's network and information infrastructure," Qin said.

Founded in 2005 by Nir Zuk and based in Santa Clara, California, Palo Alto Networks is a major global provider of enterprise security solutions. It set up a wholly owned subsidiary in Shanghai in 2021, with additional branches in Beijing, Guangzhou and other locations. 

According to its Chinese website, the global leader in artificial intelligence (AI) and cybersecurity delivers AI powered end to end security solutions spanning networking, cloud services, security operations and AI, serving more than 70,000 enterprises worldwide.

As AI agents gain widespread adoption across enterprises, new categories of security risks have become increasingly prominent, according to media reports. Palo Alto Networks has rolled out the Prisma AIRS 2.0 platform for full life cycle protection of AI applications, covering five modules: AI Model Security, AI Posture Management, AI Red Teaming, AI Runtime Security and AI Agent Security. 

It has also released Cortex AgentiX, its flagship offering built to counter threats posed by AI agents. Its website notes that its solutions serve sectors including the public sector, financial services, manufacturing, healthcare, transportation and small and medium sized enterprises.

Given Palo Alto Networks' wide product coverage across networking, cloud, security operations, and AI, its extensive presence raises the likelihood of systemic security risks, while the review also alerts current customers to examine any present or future technical vulnerabilities and security shortcomings, Zhou said.

This is not the first time a US tech company has come under such scrutiny in China, driven by concerns over potential security vulnerabilities and other risks in products sold by these American firms.

The CCAC launched a cybersecurity review into US firm Micron in March 2023. The regulator said that the review targeted products sold by Micron in China, and that it aimed at securing supply chains for critical information infrastructure, mitigating cybersecurity risks stemming from potential product flaws, and upholding national security. 

The regulator later concluded that Micron's products contained serious cybersecurity vulnerabilities, which posed substantial supply chain risks to China's critical information infrastructure and endangered national security.

On July 31, 2025, authorities summoned the US chip giant Nvidia and demanded the firm provide explanations and supporting documentation regarding vulnerabilities and potential backdoor risks associated with its H20 computing chips sold to China.

In the digital era, AI has permeated every dimension of national security at unprecedented speed and scale, bringing a host of latent risks. 

"These security reviews are designed to guard against flaws in foreign cyber products that could compromise China's critical information infrastructure," Qin said. 

Cybersecurity reviews targeting products sold in China by foreign companies are fully compatible with China's commitment to high standard opening up. "China welcomes enterprises and products from all countries to partake in its development dividends, provided they abide by Chinese laws and regulations," the expert added.

Zhou said that China treats all companies, including foreign-invested ones, as domestic firms on an equal footing, while also demanding that they properly meet their compliance responsibilities. With technology advancing at a fast clip, government-business coordination on security risks can benefit companies operating in China by collectively strengthening their capacity to identify risks and respond to emergencies, Zhou added.