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Apple, Microsoft targets of Chinese media amid US spat

China’s state-run media stepped up criticism of U.S. technology companies including Apple Inc. and Microsoft Corp. as tensions escalate over cyberspying and hacking allegations.

Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT), Google Inc. (Nasdaq: GOOG) and Facebook Inc. (Nasdaq: FB) cooperated in a secret U.S. program to monitor China, said a commentary on the microblog of the People’s Daily newspaper.

China Central Television, the national broadcaster, said a provincial government was told not to buy computers with Microsoft’s Windows 8, and it quoted a professor calling the software a potential threat to China’s information security.

The rhetoric comes after China said it would vet technology companies and the Central Government Procurement Center excluded Windows 8 from a purchase of energy-efficient computers.

Those moves followed indictments by U.S. prosecutors of five Chinese military officers for allegedly hacking into the computers of American companies, and former contractor Edward Snowden’s revelations of a National Security Agency spying program.

“The threat and risk is very serious for American companies right now,” said Shaun Rein, managing director for China Market Research Group in Shanghai. “State-owned enterprises are going to choose Chinese hardware companies over the foreign ones. I don’t view this as a short-term blip.”

Growth market

That may mean American companies lose out on a growing market. Information technology budgets for Chinese companies are expected to increase 13 percent this year, compared with the global average of 0.2 percent, according to a study released in May by Gartner Inc. (NYSE: IT)

Chief information officers in China “reveal a higher business focus on growth and innovation than their global counterparts, and strong budget increases to support it,” the report said.

The NSA’s monitoring effort, known as Prism, shows the U.S. government to be an “information thief,” according to the commentary on People.cn, an Internet platform built by People’s Daily.

China should strengthen its punishments for stealing information, the microblog post said.

The Prism project traces its roots to warrantless domestic-surveillance efforts under former President George W. Bush. Apple, Microsoft, Facebook and Google said previously they received thousands of warrants for data from U.S. government entities.

Apple ‘unaware’

Apple has never worked with the NSA to create a back door in any of its products, including the iPhone, Kitty Potter, a Beijing-based spokeswoman for the company, said Monday.

“Additionally, we have been unaware of this alleged NSA program targeting our products,” Potter said by phone. “We will continue to use our resources to stay ahead of malicious hackers and defend our customers from security attacks, regardless of who is behind them.”

In a statement on its account on Chinese-language microblog Weibo, Microsoft said it doesn’t help any government with special access or information. The company also wrote that it doesn’t assist a government to attack other governments, nor does it leave a back door in any of its products and services for governments to exploit.

Taj Meadows, a spokesman for Google, referred to an earlier statement from the company saying the U.S. government doesn’t have access to Google servers.

Debbie Frost, a spokeswoman for Facebook, referred to earlier statements by the company that it has never given the U.S. government direct access to its servers.

China’s government took a separate step against Microsoft by telling officials in Jiangsu province, south of Shanghai, to cancel purchases of computers running Windows 8, CCTV reported.

The deal was scrapped in February after the central government issued a notice, the report said, citing Jiang Huazhong, director of the Jiangsu government’s purchasing center.

‘Big challenge’

“The security features of Windows 8 are basically to the benefit of Microsoft, allowing them control of the users’ data, and that poses a big challenge to the national strategy for information security,” Yang Min, a computer-science professor at Fudan University in Shanghai, told CCTV.

Microsoft, the world’s largest software maker, said it’s committed to retaining the trust of its customers worldwide in response to the Windows 8 contract in Jiangsu.

“Our Government Security Program allows governments to review our source code to confirm there are no back doors,” Kathy Roeder, a spokeswoman for Redmond, Wash.-based Microsoft, said in an email. “Customers around the world have evaluated and embraced Windows 8 as our most secure operating system.”

Microsoft said last month that it was “surprised” to learn of the central government’s decision not to include Windows-run computers in its purchase of energy-efficient machines.

The official Xinhua News Agency called that decision “a move to ensure computer security.”

Cost issue

Beijing’s municipal government has complained that Windows 8 costs too much, and several local governments have dropped the operating system in favor of locally developed alternatives, CCTV reported yesterday, according to a clip on its website.

Alternatives include Ubuntu Kylin.

“As the China government puts more focus on information security, it is likely that the compliance policy will be stricter than ever before with government procurement,” said Nicole Peng, Shanghai-based analyst with researcher Canalys. “It will pose more challenges to the foreign companies to enter or develop their business in the government and state-owned enterprise segments.”

Server reviews

China’s government said last month that it will vet technology companies operating in the country, and the Financial Times reported May 25 that China ordered state-owned companies to cut ties with U.S. consulting firms.

China is also reviewing whether domestic banks’ reliance on high-end servers from International Business Machines Corp. (NYSE: IBM) compromises the nation’s financial security, people familiar with the matter said last week.

Separately today, IBM said it was doing cloud-computing work for the state-owned Shanghai Airport Authority, which shows it’s a “trusted partner” in China. The IBM system helps manage airplane taxi times and the flow of passengers on a concourse, the Armonk, New York-based company said in a statement.

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