A new policy instituted by the Chinese government is causing more than a little consternation among Western security software vendors in general and U.S. federal trade officials in particular.

The new regulation requires all foreign computer security software to be submitted for government approval before it can be sold in China.

Software manufacturers are concerned that the ‘approval’ process will require them to reveal vital trade secrets.

Beijing has not yet released details of the approval program, which is due to come into effect on May 1, 2009.

The Chinese government earlier showed a similar special interest in commercial data encryption software and has since established its own standards for mobile phone services and wireless encryption.

Some observers say the intent of the Chinese, in bringing in the approval requirement for security software, is not to steal Western technology but to provide an advantage to new Chinese companies trying to carve out a slice of their own home market.

The huge size of the as yet largely untapped Chinese technology market — which might effectively be closed to outside vendors whose products don’t pass the approval process — has had Western manufacturers and service providers salivating since before the turn of the millennium.