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The report appears to reflect the reasoning behind the latest in a number of policy moves by the Chinese government to push US information technology companies' products and services out in favor of Chinese alternatives. Bloomberg News reports that the People’s Bank of China and the Chinese Ministry of Finance have begun asking banks to replace IBM servers with Chinese-built hardware.
The hardware swap is part of a trial program that is ostensibly part of an overall review of the nation’s financial systems security. But it is also seen as retribution for the US Department of Justice’s indictment of five Chinese military officers for alleged commercial cyber-espionage—and as a reaction to the evidence of spying on Chinese networks by the National Security Agency provided by documents leaked by former NSA contractor Edward Snowden.
This is the latest in a series of moves by the Chinese government to reduce the dependence on US companies’ information technology products. China’s State Internet Information Office announced last week that it would institute a security review program to screen all information technology products for potential backdoors and other threats.
Previously, the Chinese government’s procurement center blocked the installation of Microsoft’s Windows 8 operating system as part of a bulk purchase of “energy-efficient” computers, citing security and energy consumption. And on May 25, the Financial Times reported that the government ordered state-owned businesses to stop doing business with US consulting companies over concerns that consultants could be spying for the US government.
Duncan Clark, the chairman of the Beijing-based financial analyst firm BDA China, told Bloomberg, “Security trumps everything. China doesn’t need the US companies in the way it did for the last few decades.”
IBM has already been facing declining sales in China. Last October, it reported a 22 percent decline in sales in China—and a 40 percent drop in hardware. At the time, IBM cited a new Chinese economic development plan and the slowdown of the Chinese economy. Cisco also saw drops in China.
But there was also speculation that the drops were in part a reaction to the releases last summer of NSA documents that revealed NSA cyber-espionage efforts in China. In December 2013, The Louisiana Sheriffs' Pension and Relief Fund filed a shareholder lawsuit in Manhattan's US District Court, citing IBM's alleged cooperation with the NSA's Prism as the cause for a more than $12 billion decline in the company's market value.
http://arstechnica.com/tech-policy/2014/05/china-cites-us-for-unscrupulous-spying-wants-ibm-out-of-banks/