Chinese govt urging banks to remove IBM servers: Report

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.

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TOPICS: Security, Servers
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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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13 comments
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  • lol

    so that would be IBM servers that are "made in China" I presume?
    techrepublic@...
  • Sounds like a way to prop up a slowing economy

    Force people to buy inward.
    William.Farrel
    • Heaven forbid...

      ...we try to do that in the USA.
      nssdiver
      • Not saying anything either way

        just offering up another possible explanation beyond "they'll spy".
        William.Farrel
  • Sounds like China and Obama use the same tactics....

    Let see, create FUD about it's ecological impact and drive costs up on coal to the point a normally thriving business is unsustainable because Obama wants to try an drive business to solar companies who are unsustainable even with millions of funding, tax breaks, and free marketing. Oh wait, he's destroying one thriving American industry by artificially creating a market for another American industry...scratch that, he's only succeeded in destroying them both. Sounds like China is at least trying to bring business INTO its country.
    patrickg@...
    • Sounds more like a political venting for you

      This is a tech article about IBM server not to be use in China's banks. But you turn it around into a political tirade. If your concern is for solar companies or America industry, this is not the place or article for that. Go to a political forum for that. There is no contribution to this article in your comments. Just a tirade.
      jazzy2945
  • Go China

    We in the west have been wary of goods from China because we have found back doors and counterfeit parts/devices (is well documented, go look it up) and China has suspected this in devices and parts from the west for years. With the revelations from the Snowden files they finally have the "proof" they need to counter the claims that they are the problem.
    I am hoping they do try to use their own designed and manufactured systems and I want to see what happens. Will it work, will it flop, will hilarity ensue?
    sysop-dr
  • it's not all that funny!

    Remembering that mistrust between super powers is how wars start..
    ursulus
  • Yet another variation...

    On mutual kicking out of diplomats.
    meski.oz@...
  • RE: Chinese govt urging banks to remove IBM servers

    Yeah, like that's going to fly. C-level managers of capitalist enterprises, even in communist countries, don't like spending money unless they have to (or it involves adding to their stock options).
    Rabid Howler Monkey
    • The Party does have some leverage

      In a communist dictatorship, bad things tend to happen to those who don't cooperate with the authorities; even if no laws are broken.
      John L. Ries
  • Chinese government re - IBM.

    Well now, if the Chinese do not want IBM equipment then the rest of the world should put a similar ban on Chinese made tech products. In this way we just might see some common sense come out of China and teach them that trade is a two way treat not a one way event.
    bjwarnock
  • Can You Really Blame Them?

    Seriously, can you blame them? If our country was to find back doors in Chinese-made hardware we would have them replace it immediately or face not being able to function in our country until these measures were taken. To sit back and ignore it would be detrimental to the security of their nation and be nothing short of treason. If I were the president of an affected country I wouldn't just suggest it, I would shut it all down until it was fixed or replaced. It has nothing to do with our trade with China, it has everything to do with security and the fact that we're doing this to start with.
    How many countries are going to trust our American made hardware now, knowing that it has most likely been comprimised? Even our allies are looking elsewhere for servers now, and this in turn will seriously hurt our computer industry. IBM and others are looking at billions of lost revinue, meaning lost jobs and less tax money being collected. The NSA is ruining our nation, it's time to real them in....
    Tinman57