Cisco Systems

Apple, Cisco gear off Beijing's shopping list in surveillance fears

PUBLISHED : Thursday, 26 February, 2015, 3:31am
UPDATED : Thursday, 26 February, 2015, 10:37am

China has dropped some of the world's leading technology brands from its approved state procurement lists in what some analysts said was a response to revelations of widespread Western cybersurveillance.

More locally made products were approved, which others put down to an impulse to shield China's domestic technology industry from competition.

The chief casualty was US network equipment maker Cisco Systems, which in 2012 had 60 products on the Central Government Procurement Centre's (CGPC) list, but by late 2014 had none, an analysis of official data showed.

Smartphone and PC maker Apple has also been dropped over the period, along with Intel's security software firm McAfee and network and server software firm Citrix Systems.

The number of approved foreign tech brands fell by a third, while less than half of those with security-related products survived the cull.

An official at the procurement agency said there were many reasons why local makers might be preferred, including sheer weight of numbers and the fact that domestic security technology firms offered more product guarantees than overseas rivals.

China's change of tack came after leaks by former US National Security Agency (NSA) contractor Edward Snowden in mid-2013 that exposed several global surveillance programmes, many of them run by the NSA with the cooperation of telecom companies.

"The Snowden incident, it's become a real concern, especially for top leaders," said Tu Xinquan, associate director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing.

"In some sense the American government has some responsibility for that; [China's] concerns have some legitimacy."

Cybersecurity has been a significant irritant in US-China ties, with both sides accusing the other of abuses.

One Western technology firm executive who declined to be identified said the post-Snowden security concerns were a pretext, and the real objective was to nurture China's domestic tech industry and support its expansion overseas.

The CGPC list, which details products by brand and type, is approved by China's Ministry of Finance, the CGPC official said.

The Ministry of Finance declined immediate comment.

"We have previously acknowledged that geopolitical concerns have impacted our business in certain emerging markets," a Cisco spokesman said.

An Intel spokesman said the company had frequent conversations at various levels of the US and Chinese governments, but did not provide further details.

Apple declined to comment, and Citrix was not immediately available to comment.