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China tells its banks to remove IBM servers over snooping fears

Because they're bound to have back doors
Tue May 27 2014, 16:07
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THE CHINESE GOVERNMENT has urged its banks to stop using servers built by IBM because it believes that they might be used for espionage.

According to unnamed sources cited by Bloomberg, the People's Bank of China and the Chinese Ministry of Finance have completed a yet to be published study and have begun to approach banks in the hope that they will remove IBM equipment in favour of locally produced servers.

The motivation for these announcements comes in part from concerns that IBM is working with the US National Security Agency (NSA), but also partly as retaliation for the recent indictment by US prosecutors of five Chinese military officers that are alleged to have hacked into US computers.

IBM sold its low-end x86 server business to Chinese computer maker Lenovo at the beginning of the year for $2.3bn, though the deal is yet to be completed after it came under US regulatory scrutiny. The servers that China has concerns about are high-end mainframe systems that remain under US control, however.

An anonymous source from a Chinese bank expressed doubts to Reuters that such a move is logistically possible.

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

In a statement, IBM said, "IBM is not aware of any Chinese government policy recommending against the use of IBM servers within the country's banking industry. In fact, news reports now state that China's National Development and Reform Commission has not heard of any alleged directive to that effect. IBM is a trusted partner in China and has been for more than 30 years."

As well as its suspicions regarding US sourced servers, the Chinese government has recently told government departments that they must not use Microsoft's Windows 8 or Windows 8.1 operating systems.

At present China is providing its own internally sourced patches for Windows XP after Microsoft ended support in April, but it is said to be working on a replacement of its own based on the Linux operating system. µ


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