Chinese Government Bans Microsoft

c543272_mChina is ramping up its campaign against Microsoft, following its ban in May on the installation of Windows 8 on government computers. Officials of China’s State Administration for Industry & Commerce reportedly have made unannounced visits to Microsoft offices in Beijing, Shanghai, Guangzhou and Chengdu. They apparently questioned staff in at least one office.

There’s speculation that the move is tied to China’s concerns about the United States National Security Agency’s PRISM surveillance program, for which Microsoft and other prominent high-tech vendors reportedly have provided data. Or the visits could be the latest move in a trade war between China and the U.S.

“We aim to build products that deliver the features, security and reliability customers expect, and we will address any concerns the [Chinese] government may have,” said Jessie Wong, of Microsoft’s PR agency Waggener-Edstrom, echoing the company’s stock statement in response to this issue.

Foreign technology services providers such as Google and Apple could pose a cybersecurity threat to Chinese users, China’s state-run People’s Daily warned in June.

Microsoft and other major tech companies were required to transfer user information to the NSA, it also said, citing a China-based cybersecurity expert.

One week earlier, Beijing had announced it would impose a security review on imported technology equipment.

The Bush administration in 2006 canceled plans to purchase about US$1.3 million-worth of Lenovo PCs from CDW, reportedly because of fears the company might have installed backdoors at the behest of the Chinese government.

President Obama last year banned U.S. government agencies from purchasing Chinese computer technology in retaliation for Chinese hackers’ attacks on U.S. companies.

In a related development, the U.S. Department of Justice this May charged five Chinese military officers with hacking into U.S. companies’ computers to steal trade secrets.

Further, Lenovo’s $2.3 billion bid to purchase IBM’s low-end x86 server business is being held up because of an ongoing review by the Committee on Foreign Investments in the US, or CFIUS, around issues of national security. Several government agencies purchase these servers, as do AT&T and Verizon Wireless.

Chinese hackers breaking into U.S. companies’ servers to steal intellectual property has been going on for years, and product piracy is rife in China.

Chinese government agencies themselves use pirated Microsoft software.

Nevertheless, Microsoft wants to retain a presence in China, said Atkinson, because “given that it will be the largest economy in the world at some point in the future, [China] should be a very important market for Microsoft.”

(Image Source: iCLIPART)