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PRISM scandal turns spotlight on US firms in China

By Chen Boyuan: 0 Comment(s)Print E-mail China.org.cn, June 27, 2013

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Edward Snowden's revelations of how the NSA's PRISM project has been monitoring citizens' electronic communications is reminiscent of the world depicted in George Orwell's classic novel "1984." Snowden's revelations informed us how our personal data is being stolen by the NSA and stored in its giant data centers.

Huawei, a leading technology company in China [file photo]

We now also know that China has been a victim of PRISM's surveillance program, a fact which has caused considerable disquiet in China. In one of its commentaries, China's state-run news agency Xinhua said that America "has turned out to be the "biggest villain of our age."

But the situation has also given Beijing food for thought. U.S. high-tech companies maintain an expanding presence in China and the so-called "group of eight" U.S. companies, Cisco, IBM, Google, Intel, Apple, Qualcomm, Oracle and Microsoft have a close relationship with such key Chinese sectors as the government and military.

Thanks to this relationship, U.S. intelligence agencies would have little difficulty in gathering information from China. It has been reported that Microsoft and Google are among a number of companies participating in the PRISM program, and they have apparently been asked for users' data by the U.S. government.

The PRISM incident has also led to calls for Chinese companies, especially telecom operators, to reduce their reliance on Cisco in what has been termed a "de-Cisco movement." It will take time, however, for domestic products to completely replace U.S. imports. There have also been calls for the establishment of a Chinese national information security agency.

PRISM is actually part of Stellar Wind, a bigger surveillance program which carries out surveillance based on metadata analysis.

Metadata refers to "data about data" and it precisely shows all information -- time, location, equipment, and participants -- related to a given electronic communication. The NSA has reportedly spent US$146 million on equipment specifically for the purpose of storing metadata and such data comprises roughly one-seventh of its total gathered intelligence.

Security implications

Washington continues to be wary of made-in-China technology products, with both Capitol Hill and the White House blocking Chinese high-tech companies from entering the U.S. market.

In 2012, the U.S. House of Representatives Permanent Select Committee on Intelligence warned that China's two leading technology firms Huawei and ZTE "pose a national threat to the U.S.," advising that U.S. companies and government should avoid doing business with them.

In March this year, U.S. President Barack Obama signed a spending bill which barred the U.S. government from buying information technology made by companies linked to the Chinese government. The ban applies to U.S. government agencies including the Department of Justice, Department of Commerce, NASA, and the FBI and was motivated by the fear of cyber attacks.

U.S. companies have by contrast had a much easier time entering the Chinese market. Companies in the "group of eight" have their products installed on China's key information technology infrastructures.

IT insiders claim that the Chinese authorities have more than lived up to their commitments under the Agreement on Government Procurement (GPA), a plurilateral agreement under the auspices of the WTO. Chinese government procurements have gradually seen imported items being treated in the same manner as domestic products.

"Chinese banks use Oracle for data storage, and IBM computers are extensively used in departments in the military, armed police and meteorological offices," said IT specialist Zhang Liang, who wished to conceal the name of the company he works for. "Effectively, it means that our doors are wide open."

He added: "Meanwhile, the U.S. has taken a clear-cut stance, banning Lenovo computers from being used in its government departments, saying that Lenovo would compromise its national information security."

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