Chinese govt urging banks to remove IBM servers: Report

Summary:The Chinese government is urging its domestic banks to replace high-end IBM servers with locally-manufactured servers in the wake of the US-Chinese hacking scandal, according to a report by Bloomberg.

China's banks are being urged by the country's government to remove high-end servers made by IBM in favour of servers made by a local brand, according to a report by US news outlet, Bloomberg.

According to Bloomberg sources, the People's Bank of China and other government agencies, including the Ministry of Finance, are reviewing whether the country's commercial banks' use of high-end IBM servers compromise China's financial security.

If the Chinese government is, in fact, pressuring its banks to remove US servers, the move is a clear escalation of the troubled relations between the two countries following Washington's accusation last week that Chinese military operatives had hacked into US companies for trade secrets.

Last week, China indicated it would vet technology companies operating in the country in order to identify potential national security breaches, after the US charged five members of a Chinese military unit for the alleged hacking.

According to China's official news agency, Xinhua, the vetting was aimed at preventing suppliers from taking advantage of their products to illegally control, disrupt or shut down their clients’ systems.

"For a long time, governments and enterprises of a few countries have gathered sensitive information on a large scale, taking the advantage of their monopoly in the market and technological edge," said Jiang Jun, spokesperson for the Chinese State Internet Information Office. "They not only seriously undermine interests of their clients but also threaten cyber security of other countries."

On 21 May, China's defence ministry denounced Washington's allegations as "a pure fabrication by the US, a move to mislead the public based on ulterior motives". Last week, Chinese assistant foreign minister Zheng Zeguang summoned US ambassador Max Baucus and lodged a "solemn representation" over the indictment.

On 25 May, China demanded an explanation over reports the US National Security Agency had hacked the servers of Chinese telco giant, Huawei Technologies.

Meanwhile, Xinhua reported last Thursday that Chinese OS developers were "thrilled" at news of the ban on Windows 8 by the central government, as the decision presents an opportunity to seize market share in the future.

"Domestic OSes are already an alternative to Windows in terms of security, and also easy to use", the agency said.

While China turns a critical eye on US technology within its borders, it is welcoming Japanese tech giant, Sony, brokering a deal to allow Sony PlayStation consoles into the country.

China in January formally authorised the domestic sale of game consoles made in its first free trade zone in Shanghai, opening up a market with an estimated 500 million players to foreign companies including Sony, Microsoft, and Nintendo.

At the time of writing, IBM had not responded ZDNet's queries.

Topics: Security, Servers

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Leon covers enterprise technology and start-ups from ZDNet's Sydney newsroom.

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