China bans Apple and others from state-purchase lists
Beijing has removed a number of leading US tech companies from their approved state-purchase lists – including Apple, Cisco and Citrix Systems
China has removed companies such as Apple, Cisco and Citrix Systems from their state purchase lists. Some speculate this is to protect the country's domestic market from international competition, while Chinese authorities claim it is due to mounting cyber security concerns
Amendments to the list began last year and include the reallocation of local producers in place of their US counterparts. Among those removed is Intel Corp’s McAfee security subsidiary, as well as anti-virus software firms, Kaspersky Lab and Symantec Corp.
Fears regarding the level of security upheld by US tech companies began following the Edward Snowden debacle
Chinese authorities attribute the move to growing cyber security concerns, while some argue that the state is protecting the domestic market from international competition. The latter theory is supported by the growing presence of US tech firms in China in recent years, together with enhanced efforts and investment in the country’s promising tech industry.
Fears regarding the level of security upheld by US tech companies began following the Edward Snowden debacle in 2013 which revealed that the National Security Agency (NSA) was using company data for surveillance purposes. Concerns of a cyber attack on China’s government systems have subsequently mounted.
Cisco has been hit the hardest by the decision, with revenue from China falling by 33 percent in Q1 2014 compared with the previous year. “We have previously acknowledged that geopolitical concerns have impacted our business in certain emerging markets,” a Cisco spokesman told Reuters. The added pressure of faulty memory chips has caused the company’s net income to drop by 55 percent to $1.4bn in the latest quarter.
The upshot is that due to China’s inferior security software systems, Beijing remains vulnerable to cyber attacks, despite its recent measures to combat this threat. Conversely, the expected boost in sales for local firms can be invested further into R&D and used to improve Chinese software security – although being on a par with the US’ fast evolving sector is an overwhelming challenge.
