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China seeks to end US dominance in information technology



by Joseph Earnest June 18, 2014   


Newscast Media BEIJINGWhile China and the US trade accusations of cyber-espionage, Beijing is seeking to rid itself of US-made IT products which dominate the market. But developing competitive alternatives is easier said than done.

The "cyber war" between China and the US escalated in the beginning of May when the US Justice Department announced it was pressing charges of economic espionage against five members of a unit allegedly in charge of electronic warfare within China's People's Liberation Army (PLA). The officers had reportedly been involved in the hacking of US companies.

China rejected these accusations as "fabricated and absurd" and quickly cancelled bilateral talks on cyber security that had only been agreed upon recently. But it seems that Beijing does not intend to react merely on the diplomatic front: In mid-May, it forbade government agencies from updating their computers to the new Microsoft Windows 8 operating system. Chinese officials justified the move, saying the new system had "built-in backdoors.

China has been threatening to stop using US products such as IBM servers or Cisco routers for some time. Simultaneously, the US has been warning companies from using Chinese technology. According to information leaked by former US intelligence contractor Edward Snowden, Chinese smart phone maker Huawei has been the target of intensive espionage by the National Security Agency (NSA) - all the more reasons for the growing mutual mistrust.

Tedious catch-up race

China has been trying to become independent from US technology since long before the first Snowden revelations. The year 1999 saw the release of the first version of Red Flag Linux, an open operating system specifically designed to replace Microsoft's Windows on computers used in China.

But implementation has been slow. According to the US technology website Ars Technica, 90 percent of the Chinese are still using Windows. In fact, any competitor seeking to enter the Chinese market faces huge challenges - as demonstrated by Red Flag which officially declared bankruptcy in February 2014.

This is why the Chinese Ministry for Industry and Information Technology (MIIT) and the British company Canonical recently started working on an alternative operating system called "Ubuntu Kylin."

Another area where China would prefer to break free from US software dependency is mobile phones. However, it might be difficult to convince consumers of this approach as operating systems used on Chinese-made smart phones - such as Xiaomi - are almost exclusively based on Google's Android and user numbers are growing increasingly fast, especially in rural areas and smaller cities. Reversing that trend might prove quite a challenge.

Furthermore, experts are of the view that even the successful development of a better operating system does not guarantee a large market share. "There is this concept called network effect: Once a sufficient number of people start using a product, others will follow, even if it isn't, objectively seen, the best solution," economist and sinologist Doris Fischer told DW. Right now, Microsoft and Google seem to be the ones profiting from this trend in China.

In the meantime, some Chinese companies seem keen to recruit employees from US tech firms. According to a report by the New York Times, the Chinese server manufacturer Inspur announced a campaign titled "IBM to Inspur" in which it prided itself in having taken over several employees from IBM.

Simultaneously, Lenovo, world market leader for desktop PCs, is negotiating with IBM to purchase its unprofitable low-end server business. According to Hong Kong's South China Morning post, the deal is now under threat due to the growing tensions between the two countries. Moreover, US regulators could still prevent the purchase from happening.  Add Comments>>


 Source: Deutsche Welle









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