IBM Systems Reportedly Targeted by Chinese Officials

By Jeffrey Burt  |  Posted 2014-05-27 Print this article Print
IBM servers China

Both vendors and Chinese officials disputed the report, but such suspicions have made it increasingly difficult for Huawei to sell its networking gear in the United States although the company is continuing to try to expand the reach of its U.S. enterprise solutions business. Earlier this year, Huawei officials noted that the European market is more open to its technology, and that in 2013, the company had increased its investments in the region, spending $3.4 billion buying components and services from Europe.

The leaks from Snowden over NSA spying—both domestically and internationally—have given China more of an upper hand, particularly with recent reports that the NSA was intercepting shipments of IT equipment from such U.S. vendors as Cisco Systems to install surveillance technology. The allegations follow a report by German magazine Der Spiegel in January that the NSA had compromised computing systems from U.S. vendors to aid in its spying activities.

The Chinese government responded earlier this month by saying it will take a look at tech companies with operations in the country, which is one of the largest and fastest-growing tech markets in the world. According to the Financial Times, China also ordered that all state-owned companies stop doing business with U.S. consulting firms.

China's actions and its dispute with the United States already are taking a toll on U.S. tech companies. Cisco officials May 14 said the giant networking vendor is seeing continued softness in emerging markets—including China—with sales in the first three months of the year falling off 13 percent over the same period in 2013.

Cisco CEO John Chambers wrote President Obama May 18 asking that the administration rein in the NSA's spying programs, saying it is damaging global confidence in the industry and hampering vendors' ability to sell their products.

"We simply cannot operate this way," Chambers wrote. "Our customers trust us to be able to deliver to their doorstops products that meet the highest standards of integrity and security."

The United States on May 19 indicted five Chinese officers for allegedly hacking into the systems of U.S. companies, allegations that Chinese government officials accused the United States of making up.



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