10 Updates

China Targets IBM In Foreign Tech Crackdown

May 28 2014, 6:37am CDT | by

The latest reports that Beijing is pressuring Chinese banks to stop using high-end servers from computing giant IBM (NYSE: IBM) don’t come as a huge surprise, amid escalating tensions between China...

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8 weeks ago

China Targets IBM In Foreign Tech Crackdown

May 28 2014, 6:37am CDT | by

The latest reports that Beijing is pressuring Chinese banks to stop using high-end servers from computing giant IBM (NYSE: IBM) don’t come as a huge surprise, amid escalating tensions between China and the US over cyber spying. This particular development is just the latest in a series of similar moves that dates back to last year, when Beijing began quietly pressuring many big state-run firms to stop using US tech products following revelations from the Edward Snowden cyber-spying scandal. The ironic element of Beijing’s anti-foreign tech campaign is that it could actually make the nation’s technology networks and systems even more vulnerable to spying, since most domestic products are far less sophisticated than their foreign counterparts.

I’ll be quite open with my own view that most of Beijing’s concerns about the safety of equipment and software from major US firms seems more political than due to actual security issues. Chinese leaders are unhappy that Washington and Europe have taken separate steps to limit sales by 2 of China’s biggest tech names, Huawei and ZTE (HKEx: 763; Shenzhen: 000063), due to concerns about security and unfair state subsidies. Similar moves against Chinese solar panels in a more trade-related dispute are also a sore issue for Beijing.

Neither the US nor Europe has done anything to limit the sales of Chinese computers, cellphones or software in their markets, and Chinese giant Lenovo (HKEx: 992) is a major player in both places. Regardless of the reasons, China is now reportedly pressuring its big state-run banks to stop using high-end servers from IBM in their IT networks, and replace them with local brands. (English article ).

An IBM spokesman said he was unaware of any such orders from Beijing, but a media report noted the move comes just a week after the US charged 5 Chinese military officers of trying to steal trade secrets from US companies. The report added that China’s central bank and finance ministry are reviewing whether use of the IBM servers compromises China’s financial security.

This latest report comes the same week that other reports emerged saying China was telling big state-owned companies to cut their ties with western consulting firms. It also comes just a week after Beijing forbid government agencies from purchasing Microsoft’s (Nasdaq: MSFT) newest Windows 8 operating system for unspecified reasons. (previous post ) This gradual freeze-out of western tech firms dates back to late last year when some state-run companies reportedly cut back on their use of networking equipment from US giant Cisco (Nasdaq: CSCO). (previous post )

I might disagree with anyone who sees a broader conspiracy by China in this series of moves. Tensions between Beijing and Washington over security have been building for much of the last 2 years, starting with a US ban on the import of Chinese telecoms equipment due to security concerns. Revelations from the Edward Snowden scandal caused tensions to rise further, and last week’s industrial espionage charges by Washington against China made the situation even more tense.

I would expect the tensions to heat up a bit more before perhaps the situation begins to cool next year if no major new accusations come out. But as I said at the outset, the biggest loser in all this could easily be China, since the domestic products that government agencies and big state-run enterprises will have to buy now are almost certainly far less secure than comparable products from more experienced western names like IBM, Microsoft and Cisco. But in this case actual security seems to be a secondary concern, and politics will play a far bigger role in this ongoing war of words until tensions finally start to cool.

Bottom line: Tensions between Beijing and the west over high-tech security are likely to rise further this year, resulting in lost China sales for big tech names like Microsoft and IBM.

Doug Young is a former China company news chief for Reuters who teaches financial journalism at Fudan University in Shanghai. To read more of his commentaries on China tech news, click on www.youngchinabiz.com .

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by ro ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Raky ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hish ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states la ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million i ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mohamed s ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving a ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara D ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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