China lashes out at IBM and Cisco

China claims that Cisco is working closely with US intelligence services and is therefore guilty of cyber espionage. Cisco denies this. In addition, the Chinese rulers are considering banks in the country to remove IBM servers for fear of back doors.

Relations between the US and China have deteriorated further after the US government indicted five members of the Chinese People’s Liberation Army on charges of cyber espionage. On Tuesday, the Chinese accusation that the American network equipment maker Cisco is colluding with the NSA and other intelligence organizations, as well as with the military. For example, the Americans would facilitate cyber espionage on the Chinese network infrastructure.

The allegation was made in the China Youth Daily, a newspaper owned by the Chinese government, reports The New York Times. Cisco strongly denies that it is working with governments to weaken the security of its hardware, for example by building backdoors in the firmware. The listed company also denies monitoring data traffic from Chinese or others. However, Cisco’s sales performance has fallen sharply in the lucrative Chinese market in the past year.

Although the Chinese are not announcing concrete steps against Cisco, Bloomberg news agency reports that the country is looking at whether China’s reliance on IBM servers does not make them vulnerable. The central bank and the finance ministry have asked some Chinese banks to replace IBM servers with Chinese-made equipment on a trial basis. A possible boycott in the purchase of IBM servers could cost the American IT giant many dollars, financial analysts warn.

China has already taken several retaliatory measures after the new US steps. For example, the communist-led country has shelved its cooperation with a security working group that it set up together with the US. It has also banned Windows 8 from new government computers. The US, in turn, would no longer grant visas to Chinese who want to travel to the US to attend hacker conferences such as Black Hat or Def Con.