Chinese Government Wants Domestic Banks to Replace IBM Servers with Local Brands to Protect Financial Security

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Chinese banks rely heavily on servers from IBM, and the government is reviewing whether or not this compromises China’s financial security, according to a report on Tuesday by Bloomberg.

According to the report, government agencies in China are asking some banks to replace IBM servers with a local brand as part of a trial program.

The review is part of a broader initiative that the Chinese government is undergoing in retaliation of the indictement of five Chinese military officers last week for hacking into US companies to steal trade secrets.

The Chinese government has cracked down on tech companies involvement with US consulting firms.

This week a report by Reuters suggested that Washington is considering restricting visas, preventing Chinese nationals from attending popular hacking conferences Def Con and Black Hat.

Following Edward Snowden’s revelations, Chinese domestic technology brands are in a good position to compete with US-based technology companies, particularly since China is such a strong market for Internet services and personal computers.

Earlier this year Chinese technology company Lenovo announced its plans to acquire IBM’s x86 server business. The transaction still awaits regulatory approval.

According to Bloomberg’s sources, in addition to concerns that IBM servers pose a security threat, the government also believes IBM servers are more expensive in China than in other regions.

American companies are also concerned with operating in China. A recent survey conducted by the American Chamber of Commerce in the People’s Republic of China shows that 47 percent of US businesses in China say data security is their greatest concern with cloud computing.

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