IT vendors in search of new business code

By Gao Yuan (China Daily) Updated: 2014-07-24 07:16

Foreign tech companies are caught in the middle of a cybersecurity conflict between the two biggest economies, reports Gao Yuan

Less than 10 kilometers north of Tian'anmen Square in Beijing sits a 39-story office building known as Pangu, next to the 2008 Olympic venue Bird's Nest. This "five-star" workplace was named after a being that, according to Chinese mythology, was the creator of all.

The dragon-shaped plaza, on the north-south axis of the nation's capital, reflects many themes and images from traditional Chinese culture, and many domestic companies have chosen Pangu as their headquarters, even though the building is rather far away from the city's main business districts.

IT vendors in search of new business code

Local firms can benefit from Windows 8 ban

Inspur Group trying for IBM customers

The biggest tenant of Pangu is not a domestic company, and it doesn't even have a Chinese name.

Hundreds of IBM Corp employees have called it home since 2010.

Following the idea of being "close to power", the United States-based technology giant must be hoping Pangu could bless its China business three decades after it entered the world's largest technology market.

Everything was going well until this summer.

In May, media reports said the government would order the removal of Big Blue's servers from the banking industry, one of the most valuable markets for IBM in China.

The company quickly responded, stressing its longstanding partnership with the Chinese government.

Yet the incident still worried other foreign technology companies, which were concerned that bans on their business could be implemented to strengthen information security.

Their worries quickly came true, as the government later ousted Microsoft Corp's Windows 8 operating system and Symantec Corp's security software from the government procurement list.

Industry and Information Technology Minister Miao Wei warned that China's information security could face a "direct threat" if the government failed to run a thorough background check on companies.

Analysts noted that the sudden barriers to overseas IT companies were imposed after the US Department of Justice accused five Chinese military officers of stealing business information on line from US companies.

China denied the charges and raised its own information security concerns.