China bans US tech companies

By Nicole Miskelly | 26 February 2015

China has banned government purchases from some of the largest US technology firms. A list of approved technology vendors by the Chinese central government, which did not include tech giant Apple or equipment maker Cisco, was obtained by a news agency earlier this week.

The vendors have reportedly been removed since Edward Snowden disclosed that the NSA routinely accessed US company data and hardware to spy on adversaries. On Sunday night, Citizenfour, a documentary film about Edward Snowden revealing US spy programs from a Hong Kong hotel room, won an Oscar for best documentary and three days later the firms that were implicated by Snowden (including Cisco and Apple Inc) were banned from providing US tech products to China.

According to Reuter’s software maker Citrix Systems and Intel’s McAfee unit have also been removed from the list and reports show the number of China’s approved foreign tech companies fell by a third between 2012-2014. Last year, Beijing also banned government offices from buying the latest version of Microsoft Windows and security software from Kaspersky Lab and Symantec 

Cisco has blamed the Snowden scandal for destroying its business in China since NSA programs were first divulged in 2013. Apple has also had a number of run-ins with Chinese regulators over user privacy issues, but its absence from the list (which does not apply to local governments, military or state-owned enterprises who have their own lists) may have less of an impact because of the company’s large consumer focus.

Some believe that the move is in response to the revelations about the US’s digital surveillance, and others believe it is a continuation of China’s wish to control state purchased technology operating domestically.  

The cyber hacking feud between China and the US has leaked into the business world and China is reportedly moving forward with plans to impose new cybersecurity rules on Western companies that would allow Beijing officials to inspect their code.

Since the news, the FT reports that European and US companies have asked their authorities to help them to stop the implementation of new Chinese cyber security regulations. In a letter to the European Commission sent yesterday, six business organisations said the “worrisome” Chinese regulations “could close the door for many foreign IT companies to the Chinese banking IT market.”

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