CHINA TOPIX

03/28/2024 08:40:12 pm

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China To Scrutinize IBM Servers And Other U.S. Tech For Security Breach

IBM in China

(Photo : ibtimes.co.uk) Big Blue's logo.

The Chinese government said it will study its domestic banks' reliance on IBM's high-end servers and find out if the servers are compromising China's financial security.

Bloomberg reported that government agencies in China, which include the Ministry of Finance and the People's Bank of China, have asked local banks in the country to do away with IBM servers and replace them with local brands.

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In an email statement, Jeff Cross, spokesperson for IBM, said that his company is not aware of any Chinese government policy that recommends the removal of IBM's servers within its banking industry. Cross added that current news reports in the country said that even China's National Development Reform Commission has not heard of any directive from the national government.

"IBM is a trusted partner in China and has been for more than 30 years," Cross said in the statement.

According to four sources who wish to remain anonymous, the review of IBM's case has not yet been made public.

Many see the report as a form of retaliation of the Chinese government after the United States indicted five Chinese army officials for cyber espionage. The army officials were accused of hacking into the computers of American companies which involved stealing sensitive business documents such as blueprints for power plants and other trade secrets.

Also, the revelations of former National Security Agency contractor Edward Snowden on the U.S.'s spying program have negatively affected the sales of American technology in China. In fact, on May 25, the Chinese government ordered its state-owned companies to sever its ties with U.S.-based consulting firms.

Duncan Clark, chairman of Beijing-based technology consulting firm BDA China Ltd., security issues, especially those of a national scale, trumps everything. Clark is of the opinion that China's current economic status puts it in a position that it no longer needs U.S. companies compared to the last few decades.

China is now scrutinizing technology companies operating on its soil. They want to make sure that there are no potential national security breaches. This, however, puts American companies in a tougher Chinese market environment that could negatively affect their sales.

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