China to probe IT products

Cyber security crucial to safety of society: SIIO

The Chinese government announced Thursday it will vet IT products and services provided by foreign technology companies.

The announcement comes as China and the US have traded barbs over allegations of cyber spying and attacks after the US indictment of five Chinese people who it accused of hacking.

The probe is intended to safeguard national security and public interests, the State Internet Information Office (SIIO) said.

The probe, announced by the SIIO in a statement, is to prevent foreign suppliers from stealing sensitive information from the Chinese government, institutions, corporations, and individuals.

Cyber security is an integral part of China's national security, SIIO spokesperson Jiang Jun told the Xinhua News Agency Thursday.

Jiang said that Chinese society at different levels has been threatened in recent years by heavy scrutiny from government and corporations of some foreign countries who take advantage of their dominance in the technology sector.

The China Internet Development Report 2014 jointly issued by the Internet Society of China and the China Internet Network Information Center on May 15 said that "backdoors" created overseas hacked about 61,000 websites on the Chinese mainland last year, up 62.1 percent from 2012.

Suppliers will be banned from illegally controlling, disrupting or shutting down client systems. They are also forbidden to gather, store, process or use client information.

Companies will be barred from supplying products and services in China if they fail the inspection, said Xinhua, quoting the statement.

The US Department of Justice on Monday accused five Chinese military officers of hacking into US companies and stealing trade secrets. The accusation was slammed by China as having no basis in truth.

"The US is the biggest threat to China's cyber security with its large-scale spying and attacks," Qin An, director of the Strategy Research Institute for China's Cyber Space, told the Global Times.

Statistics from the National Computer Network Emergency Response Technical Team Coordination Center of China reveal that over 1 million computers in China were hacked between March 19 and May 18. These attacks originated from US servers.

Jiang denied the policy will target specific countries or companies, but stated that Edward Snowden's revelations last year of worldwide US spying operations raised major concerns over China's cyber security, Phoenix TV reported.

The vetting will focus on software or operating systems used by key industries like energy, finance, transport and telecommunications.

"China needs institutional protection to ensure the cyber security of financial and commercial activities, which concerns the daily life of Chinese citizens," Qin said.

"US companies also impose heavy vetting on technology firms, especially Chinese companies like Huawei and Lenovo," Chen Kai, Secretary General of the China Arms Control and Disarmament Association, told the Global Times.

"China's cyber system is still vulnerable to foreign attacks and that's why we have to rely less on foreign services," Chen said.

China announced on May 16 that it will forbid the use of Microsoft's Windows 8 operating system in new government computers.

In an e-mail to the Global Times, Microsoft said they were surprised by the news.

US networking giant Cisco System's China office did not respond to an interview request.

Some 70 percent of Chinese banks, including the four major banks, are also using Cisco's systems in their data centers.

US technology firms such as IBM and Cisco have already seen sales decline in China since 2013 following the Snowden revelations, according to a report by Reuters. IBM's China sales have plunged by over one-fifth for three consecutive quarters as of April. Cisco's China business dropped 8 percent in the quarter to April 26.

Industry analysts and executives told Reuters that doing business in China will become even tougher with the new vetting policy.

Some domestic analysts believe that the new policy will open up more market space for Chinese Internet security companies.