China pushing banks to drop IBM servers in hacking dispute - report

Tue May 27, 2014 9:51pm IST

Visitors walk past the IBM booth at the 9th China International Software Product & Information Service Expo in Nanjing, Jiangsu province September 6, 2013. REUTERS/China Daily/Files

Visitors walk past the IBM booth at the 9th China International Software Product & Information Service Expo in Nanjing, Jiangsu province September 6, 2013.

Credit: Reuters/China Daily/Files

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REUTERS - China is pressuring its banks to remove high-end servers made by IBM and replace them with a local brand, Bloomberg reported on Tuesday, as tensions rise between Beijing and Washington over allegations of cyber espionage.

A spokesman for International Business Machines Corp said the U.S. technology company was not aware of any such demands by the Chinese government.

"IBM is not aware of any Chinese government policy recommending against the use of IBM servers within the country's banking industry," said IBM spokesman Ian Colley. "IBM is a trusted partner in China and has been for more than 30 years."

The Bloomberg report, which cited anonymous sources, comes a week after the U.S. Justice Department charged five Chinese military officers, accusing them of hacking American companies to steal trade secrets.

China on Monday accused the United States of "unscrupulous" cyber surveillance that included large-scale computer attacks against the Chinese government and Chinese companies. China has also told state-owned enterprises to sever links with U.S. consulting firms, The Financial Times reported on Sunday.

The Bloomberg report said government agencies including the People's Bank of China CNBNK.UL and the Ministry of Finance are reviewing whether Chinese commercial banks' reliance on the IBM servers compromised the country's financial security. (r.reuters.com/dyf69v)

The results of the review will be submitted to a working group on Internet security chaired by Chinese President Xi Jinping, according to Bloomberg.

A spokesman at the National Development and Reform Commission said the country's top economic planner has not told companies to change their IBM servers, nor received orders from higher levels of the government to do so.

The central bank and the finance ministry did not immediately respond to requests for comment.

Sources at China's "big four" state-owned banks said they had no knowledge of pressure for a technology change, saying any replacement of such systems would not be an easy task.

"We haven't heard about the order," an official at one of the bank's IT department said, declining to be identified because he was not allowed to speak to the media.

"There aren't any locally made hardware around that can handle the massive amount of data in the banking industry."

Over the weekend a U.S. official told Reuters the government was looking at a number of measures to curb Chinese cyber espionage, including visa restrictions to prevent Chinese nationals from attending hacker conferences in the United States this summer.

(Reporting by Xie Heng, Kang Xize, Koh Gui Qing and Aileen Wang in Beijing, Bi Xiaowen in Hong Kong, Arnab Sen in Bangalore and Jim Finkle in Boston; Writing by Kazunori Takada; Editing by Gopakumar Warrier and Kenneth Maxwell)

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