Quoted: Chinese government shuns Cisco, Apple, Intel products

“The Snowden incident, it’s become a real concern, especially for top leaders. In some sense the American government has some responsibility for that; (China’s) concerns have some legitimacy.”

Tu Xinquan, associate director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing. China has dropped American tech companies such as Apple, Intel and McAfee from its approved state-purchase lists. Most affected is Cisco Systems: The San Jose company had 60 products on the list in 2012 but by late 2014 had none, according to Reuters.

“We have previously acknowledged that geopolitical concerns have impacted our business in certain emerging markets,” a Cisco spokesman told Reuters. In fact, when a report from the Edward Snowden leaks alleged the NSA bugged Cisco products before they were delivered to the company’s customers, CEO John Chambers complained to President Obama.

It wouldn’t be a stretch to say the Snowden leaks, which led to reports of massive NSA spying, could be a factor in China’s dumping of U.S. tech products. As I wrote last year, Chinese state media called U.S. tech giants “pawns” of the U.S. government and vowed to “strengthen technology safeguards” and “severely punish the pawns.”

Citing cybersecurity concerns, China also is adopting new rules that would require tech companies to turn over source code and build “backdoors” into products they sell in China — something U.S. business groups are protesting.

But according to Reuters, Western executives and others say the security concerns are a “pretext,” and China just wants to boost its own companies.

Industry insiders also see in the changing profile of the CGPC list a wider strategic goal to help Chinese tech firms get a bigger slice of China’s information and communications technology market, which is tipped to grow 11.4 percent to $465.6 billion in 2015, according to tech research firm IDC.

Remember Huawei? The Chinese networking-equipment maker was forced to shift its focus away from the U.S. a couple of years ago after it was declared a possible security threat by the U.S. House of Representatives Intelligence Committee. Huawei is a Cisco competitor.

Update: Bill Plummer, Huawei vice president for External Affairs, told SiliconBeat in an email that the company “continues to do hundreds of millions of dollars in business in the U.S. annually, notwithstanding the protectionist, techno-nationalist market access barriers we have experienced here.” The statements made by Huawei executives in 2013 regarding the company’s focus “were not untrue in terms of our primary focus, which is on markets that are open to competition and investment,” he said.

Correction: This post previously said Huawei was forced out of business in the United States a couple of years ago. Although its executives said the company would shift its focus away from the U.S., it continues to do business here. See above update.

 

Photo by Paul Sakuma/Associated Press archives

 

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  • Lilzz l

    good, i call it even. no chinese tech in US government sector and No US tech in China state sector. fair enough.

    • Steve Hammill

      “Fair enough” as getting even in the playground?
      Sorry, but China has its big boy pants on now.

      Simply as a function of math, China probably has 4 times the number of geniuses as the USA. I can attest to the dogged determination and perseverance of Chinese people. The USA, which once set those sorts of standards, is a shadow of its former self now.

      This tech meddling by our government has the very real possibility of crushing sectors of the US Tech industry. The Chinese will build systems or software for China and they will be very good. Then they’ll make those systems and software available globally at price points that will devastate the competition.

      Do you really want to play that game?
      Sorry, we have no choice.
      China’s said, “Game on!”

      In five years time, the tech scene will see dramatic change. US engineers will be learning to speak Putonghua.

 
 
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