The controversial cybersecurity law is one step closer to being implemented after the parliament has made a second reading of the draft rules on Monday.

The controversial cybersecurity law could have significant implications for foreign businesses in the market. The draft rules require companies to comply with China's social and business ethics as well as accept supervision by both the government and the public.

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The law will also require personal information of Chinese citizens to be housed in the country. Other important business data must be stored domestically.

CNBC reported that those who wish to provide such information overseas will face a government security evaluation. The cybersecurity law will also threaten more censorship from the country.

Parliament has not yet made public all of the second draft of rules and it remains unclear when the law will be passed. Laws in China are required to be read many times before they can be passed. The first draft of the cybersecurity law, which was passed a year ago, has strengthened user privacy protection from hackers and data resellers.

The cybersecurity law has been criticized by the United States and the European Union, as they claim that it has proposed rules that are unfair to foreign firms. Human rights activists also oppose the cybersecurity law, worrying that the government could interpret the law in a biased manner.

Chinese officials argued that their internet restrictions, such as blocking popular foreign sites like social media platform Facebook and search engine Google, are needed to ensure security against threats.

Although the cybersecurity law is targeted to restrict foreign companies, local companies are also facing tightened control of the Internet by the Chinese government. Last month, limits were set on the number of healthcare advertisements on Baidu, China's biggest internet search engine, after a student died following an experimental cancer treatment he discovered on the platform.  

Tagschina, cybersecurity law, second draft, foreign businesses, Google, Facebook, parliament, abide by China's rules