China's Media Warns of Challenges to US Businesses in Wake of Edward Snowden's Revelations

This English summary from Taiwan-based Want China Times zeros in on Cisco but other tech giants are named:

Furthermore, Cisco is the key technology and equipment supplier to the US government and its military. Security experts are therefore worried that in the even of war, the US government could use Cisco’s products around the world to create an internet war to deal a major blow to adversary countries.

Cisco has overtaken Hewlett-Packard and IBM to become the world’s biggest IT equipment provider in terms of cloud computing, according to market researcher Synergy Research Group.

Cisco raked in income of more than US$1.6 billion last year in China, representing 30% of its total profits. It is expected that the Prism incident will seriously affect its business in China, while other companies such as Microsoft and Apple will also see their business in mainland China affected, the report said.

Chinese companies, Huawei is a great example, have been getting hammered by the U.S. over security concerns and Snowden’s revelations have turned the tables in a very substantial way. Jobs and growth are at stake if China further limits technology company access to it’s market. Billions of dollars, and god knows how many jobs, are at stake here.

Snowden’s root motives and the extent of Chinese involvement are still unknown but as Tech In Asia points out his betrayal adds real punch to an angle that the Chinese government has been trying to play for some time:

China has been concerned about the threat Cisco poses to Chinese information security since right around the same time the US got serious about Huawei. It’s not a coincidence, but if recent reports in the Chinese press are to be believed, China might have more reason to be concerned than originally thought.

This story, for example, suggests that NSA whistleblower Edward Snowden has told Chinese authorities that Cisco is helping the NSA spy on Chinese networks and computers. That would be a problem given that Cisco’s equipment is a part of the infrastructure of much of China’s internet.

It may not be for long:

Xu Qi, a Beijing telecom industry expert, said the Chinese authorities should conduct investigations into Cisco’s network in China.

“Based on sound evidence, market restrictions should be adopted, if it truly represents a threat,” he said.

With every revelation, every utterance, from Edward Snowden there is one primary beneficiary and it is clearly China. Spy, or not, he is the greatest assest to ever land in their laps. And it looks like we are just getting started.

John W. Little

John W. Little is the creator of Blogs of War and the host of the Covert Contact national security podcast.

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