The legislation drew a wave of criticism from rights groups and foreign business organisations, who said its vague language and overreaching security requirements would restrict freedom of speech and throw up barriers to global companies hoping to serve China's enormous market of more than 710 million Internet users.

"This dangerous law commandeers internet companies to be de facto agents of the state, by requiring them to censor and provide personal data to the authorities at a whim," said Patrick Poon, China researcher at global rights group Amnesty International.

James Zimmerman, chairman of the American Chamber of Commerce in China, said the law risks China "becoming isolated technologically from the rest of the world".

"Requirements for national security reviews and data sharing will unnecessarily weaken security and potentially expose personal information," he wrote in a statement, adding that overall the new law "creates barriers to trade and innovation".

Concerns about the legislation were overblown, Zhao Zeliang, the director of China's Cyberspace Administration, told reporters.

The law is not intended "to limit foreign technology or products or to put up trade barriers", he said.

"A few foreign friends, they equate 'security controls, voluntary controls, security trustworthiness' with trade protectionism," he said, adding "that's a type of misunderstanding. A type of prejudice." 

China's foreign ministry spokesman Lu Kang said there were "no significant differences" between the new Chinese laws and laws of other countries",adding that the law had involved a lengthy public comment period, making it "more transparent than other governments in this regard".

The European Chamber of Commerce disagreed, saying in a statement that the "overall lack of transparency over the last year surrounding this significant and wide-reaching piece of legislation has created a great deal of uncertainty and negativity in the business environment".

Amnesty's Poon said the law "goes further than ever before in codifying abusive practices, with a near-total disregard for the rights to freedom of expression and privacy."

Chinese authorities have long reserved the right to control and censor online content. The country stepped up controls in 2013, launching a wide-ranging internet crackdown.

Hundreds of Chinese bloggers and journalists were detained as part of the campaign, which has seen influential critics of Beijing paraded on state television.

Under regulations announced at the time, Chinese internet users face three years in prison for writing defamatory messages that are re-posted 500 times or more. They can also be jailed if offending posts are viewed more than 5,000 times.

Comments posted on social media have been used in the prosecution of various activists, such as human rights lawyer Pu Zhiqiang.

"If online speech and privacy are a bellwether of Beijing's attitude toward peaceful criticism, everyone -- including netizens in China and major international corporations -- is now at risk," said Sophie Richardson, China Director of Human Rights Watch.