Customers line up in front of a new Apple Store in Chongqing, Jan. 31, 2015. Apple was one of the companies dropped from China's state procurement list amid cybersecurity concerns. (Photo : Reuters)
The Chinese government has removed some of the world’s top technology brands from its approved state purchase lists while approving thousands of locally made products, which is seen by many as Beijing’s response to widespread revelations of cybersurveillance from the West.
Hardest hit was the U.S. network equipment manufacturer Cisco Systems Inc., which in 2012 had 60 products in the Central Government Procurement Center's (CGPC) list, but had none in late 2014, according to an analysis of official government data from Reuters.
PC and smartphone giant Apple Inc. was also dropped in the same period, along with Intel's security software provider McAfee and network and server software firm Citrix Systems.
The number of products on the CGPC list, which covers regular purchases by central ministries, rose sharply by over 2,000 as of the past two years with increase due mainly to local Chinese manufacturers, the report said, adding that the number of approved foreign brands dropped by a third with only less than half offering security-related products remaining.
Quoting an unnamed ministry official, Reuters said that local firms were preferred due to the sheer weight of their numbers and that domestic security technology companies provided better product guarantees than their overseas counterparts.
China's reversal in stance coincides with leaks made by former U.S. National Security Agency (NSA) contractor Edward Snowden in 2013 that exposed global surveillance programs run by the NSA in cooperation with telecom companies and European governments.
"The Snowden incident, it's become a real concern, especially for top leaders," said Tu Xinquan, associate director of the China Institute of WTO Studies at Beijing's University of International Business and Economics.
"In some sense the American government has some responsibility for that; [China's] concerns have some legitimacy."
Cybersecurity has become a thorny issue between U.S. and China. In January this year, U.S. tech groups wrote to the Chinese government complaining about its new cybersecurity regulations, which included forcing tech vendors to Chinese banks to hand over secret source codes and adopt Chinese encryption algorithms.
The CGPC list, which is approved by China's Ministry of Finance, lists down approved products by brand and type, according to Reuters. It does not detail the quantity of the product purchased, and does not bind local government or state-owned enterprises or the military, which runs its own independent system of procurement approval.
In a statement, a Cisco spokesman said that the company acknowledges the geopolitical concerns that may have affected their business in the country.
A spokesman from Intel also said that they have had conversations with both the U.S. and Chinese governments at various levels, but did not provide additional details.
Apple declined to comment, and Citrix was not available to comment as of press time.
