IBM Servers in China to be Removed After Espionage Scandal

IBM

In response to allegations made by the Chinese Government against the United States, IBM servers in China are to be removed due to recent espionage scandals made public. On May 20, the U.S. government accused five Chinese military officers with espionage and computer attacks. Recent reports show that China had stated that the United States targeted the Chinese government and various Chinese companies with cyber-attacks in response. These events in turn have prompted the Chinese government to push for the removal of IBM servers in their institutions.

The institution China is pressuring the most to replace their IBM servers is The People’s Bank of China, though other financial institutions are just as likely to follow. Other state owned companies have been ordered by the Chinese government to sever all ties with American consulting firms. Chinese officials have stated that security is their biggest concern regarding the recent actions taken. These same officials have also stated that China’s need for the United States has changed over the last several decades.

With IBM servers in China to be removed after this espionage scandal, China’s solution to replace the IBM equipment is to use locally manufactured hardware instead of the American made IBM servers. However this sudden and drastic move will create a host of problems for these institutions, mainly the fact that locally produced hardware cannot match the capabilities of what IBM can provide. Another issue is that the banking systems in China have not even heard of this order and were completely unaware of any sort of pressure to switch technologies.

Security is what appears to be the highest priority. According to sources, China refused technology programmed with Windows 8, citing security risks as the reason why. The issue of cyber-spying between Washington and Beijing has been escalating for some time. This threat to remove IBM servers from Chinese institutions can be attributed to the retaliation Beijing promised to carry out following Washington’s accusations against the Chinese officers. The Chinese officers allegedly hacked into companies such as US Steel in order to steal trade secrets.

Ian Colley, the spokesman for IBM stated that they hadn’t heard of these threats either, adding that China and IBM have had an excellent partnership for over thirty years. The U.S. government in attempts to curb Chinese spying have begun taking measures such as Visa restrictions against Chinese nationals seeking to attend conferences hosted in the United States on hacking.

China’s threats to have IBM servers removed after recent espionage claims prove that tensions between Beijing and Washington are becoming more and more volatile. The implications behind the allegations made by both countries against each other show that diplomatic relations aren’t likely to improve. Rather than working with the United States, China has chosen to cut themselves off from business and diplomatic relations entirely. This sort of action shows that China has taken a reactionary approach to the issues at hand. If China actually follows through with their plans to remove IBM servers, they will likely suffer an infrastructure backlash that could send them reeling toward financial devastation.

By David Jones

Sources:
Reuters
Rianovosti
NDTV
InternationalBusinessTimes
BusinessInsider

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