China to probe IBM, Oracle, EMC for security concerns: paper

A worker is pictured behind a logo at the IBM stand on the CeBIT computer fair in Hanover February 26, 2011.

Credit: Reuters/Tobias Schwarz

SHANGHAI | Fri Aug 16, 2013 7:49am EDT

SHANGHAI (Reuters) - China's Ministry of Public Security and a cabinet-level research centre are preparing to investigate IBM Corp, Oracle Corp and EMC Corp over security issues, the official Shanghai Securities News said on Friday.

The report follows revelations by former U.S. spy agency contractor Edward Snowden of widespread surveillance, including a program known as PRISM, by the National Security Agency and his assertion that the agency hacked into critical network infrastructure at universities in China and in Hong Kong.

Documents leaked by Snowden revealed that the NSA has had access to vast amounts of Internet data such as emails, chat rooms and video from large companies, including Facebook and Google, under a government program known as Prism.

"At present, thanks to their technological superiority, many of our core information technology systems are basically dominated by foreign hardware and software firms, but the Prism scandal implies security problems," the newspaper quoted an anonymous source as saying.

China's Ministry of Public Security declined to comment on the reported probe, and the State Council's Development Research Centre, one of the groups reportedly involved, told Reuters they were not carrying out such an investigation.

A spokesperson for the Ministry of Industry and Information Technology (MIIT), which oversees China's IT industry, said it could not confirm anything because of the matter's sensitivity. Another MIIT official told Reuters they were unaware of the reported probe.

IBM said in an emailed statement to Reuters that the company was unable to comment. Oracle and EMC were not immediately available for comment.

China, repeatedly accused by the United States of hacking, was given considerable ammunition by Snowden's allegations, which Beijing has used to point the finger at Washington for hypocrisy.

Chinese regulators and the police have begun a series of investigations in recent weeks into how foreign and domestic companies do business in the world's second-biggest economy.

"The Prism scandal certainly provides ample material for real concern," said Mark Natkin, managing director of Beijing-based market intelligence firm Marbridge Consulting.

"What the scandal has done is make it increasingly difficult to ascertain what is being done out of legitimate concern and what may be being done for any sort of political reasons," said Natkin.

(Reporting by Pete Sweeney in Shanghai and Paul Carsten in Beijing; Editing by Robert Birsel)

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China moves further towards milk powder sector consolidation: paper

An Abbott Laboratories sales staff carries a carton of powder milk tins out of a shop during a production recall outside Hanoi August 6, 2013.

Credit: Reuters/Kham

SHANGHAI | Fri Aug 16, 2013 2:52am EDT

SHANGHAI (Reuters) - The Chinese government is set to issue a formal proposal to prompt consolidation among domestic infant formula firms, a state-run newspaper said on Friday, naming Inner Mongolia Yili Industrial Group (600887.SS) as one of the likely beneficiaries.

The proposal is part of the government's drive to slash the number of domestic infant formula manufacturers over the next five years to 50 from about 200 now, the China Securities Journal said, citing an unnamed source.

By 2018, China expects the top 10 local companies to account for 80 percent of the domestic market, with the largest three-to-five firms targeting annual sales of over five billion yuan ($818.00 million), the report said.

The newspaper said Feihe International (ADY.BE) and Wondersun Dairy were also likely to gain from the consolidation plan, but gave no further details.

Analysts said the consolidation drive is part of a broader plan to boost consumption of local product and allay fears about food safety following a 2008 scandal, when formula tainted with melamine killed at least six infants and made thousands ill.

Last week, the country's price regulator also handed down record fines to foreign milk powder makers, including Mead Johnson, (MJN.N), Danone (DANO.PA) and New Zealand dairy giant Fonterra (FSF.NZ), for anti-trust behavior.

"The government sees a lot of room for consolidation and the real motive here is to improve the overall standards of infant milk formula products," said Sandy Chen, a Shanghai-based senior analyst for food and agribusiness at Rabobank.

Consumers in China are highly sensitive to food safety after persistent problems such as chemical-laced pork.

China's infant formula market is worth around $12.4 billion in 2012, and is set to double in size by 2017, according to data from Euromonitor.

In 2012, the ten biggest Chinese infant formula firms by market share were Zhejiang Beingmate (002570.SZ), Yili, Biostime International Holdings (1112.HK), Yashili (1230.HK), Daqing Dairy (1007.HK), Feihe International, Wissun Group, Wondersun Dairy, Synutra International (SYUT.O) and Ausnutria Dairy (1717.HK), the data showed.

($1 = 6.1125 Chinese yuan)

(Reporting by Adam Jourdan; Editing by Kazunori Takada and Miral Fahmy)

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China to probe IBM, Oracle, EMC for security concerns: paper

A worker is pictured behind a logo at the IBM stand on the CeBIT computer fair in Hanover February 26, 2011.

Credit: Reuters/Tobias Schwarz

SHANGHAI | Fri Aug 16, 2013 7:49am EDT

SHANGHAI (Reuters) - China's Ministry of Public Security and a cabinet-level research centre are preparing to investigate IBM Corp, Oracle Corp and EMC Corp over security issues, the official Shanghai Securities News said on Friday.

The report follows revelations by former U.S. spy agency contractor Edward Snowden of widespread surveillance, including a program known as PRISM, by the National Security Agency and his assertion that the agency hacked into critical network infrastructure at universities in China and in Hong Kong.

Documents leaked by Snowden revealed that the NSA has had access to vast amounts of Internet data such as emails, chat rooms and video from large companies, including Facebook and Google, under a government program known as Prism.

"At present, thanks to their technological superiority, many of our core information technology systems are basically dominated by foreign hardware and software firms, but the Prism scandal implies security problems," the newspaper quoted an anonymous source as saying.

China's Ministry of Public Security declined to comment on the reported probe, and the State Council's Development Research Centre, one of the groups reportedly involved, told Reuters they were not carrying out such an investigation.

A spokesperson for the Ministry of Industry and Information Technology (MIIT), which oversees China's IT industry, said it could not confirm anything because of the matter's sensitivity. Another MIIT official told Reuters they were unaware of the reported probe.

IBM said in an emailed statement to Reuters that the company was unable to comment. Oracle and EMC were not immediately available for comment.

China, repeatedly accused by the United States of hacking, was given considerable ammunition by Snowden's allegations, which Beijing has used to point the finger at Washington for hypocrisy.

Chinese regulators and the police have begun a series of investigations in recent weeks into how foreign and domestic companies do business in the world's second-biggest economy.

"The Prism scandal certainly provides ample material for real concern," said Mark Natkin, managing director of Beijing-based market intelligence firm Marbridge Consulting.

"What the scandal has done is make it increasingly difficult to ascertain what is being done out of legitimate concern and what may be being done for any sort of political reasons," said Natkin.

(Reporting by Pete Sweeney in Shanghai and Paul Carsten in Beijing; Editing by Robert Birsel)

View the original article here

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