China Accuses Cisco Of Working 'Intimately' With U.S. Gov On Cyberspying

Cisco Systems is denying accusations from a Chinese media outlet claiming the San Jose, Calif.-based networking company is aiding the U.S. government's alleged cyberspying efforts in China.

The attack on Cisco came in an article published Monday by China state-owned newspaper China Youth Daily.

According to a translation from The New York Times, the article claimed Cisco "carries on intimately with the U.S. government and military, exploiting its market advantage in the Chinese information networks, playing a disgraceful role and becoming an important weapon in the U.S. exploiting its power over the Internet."

[Related: Former NSA Director: The Holy Grail Of An Outsider Is To Be A Trusted Insider ]

Cisco denied the accusations in an email to CRN.

"We have served our customers in China for 20 years and look forward to continuing to do so. Our products are reviewed by customers and governments around the world and they meet the highest global, quality and security requirements and standards," wrote Cisco spokesperson John Earnhardt. "Cisco does not work with any government to weaken our products for exploitation. Additionally, Cisco does not monitor communications of private citizens or government organizations in China or anywhere in the world."

China's finger-pointing at Cisco comes just two weeks after Glenn Greenwald, journalist for The Guardian, published photos of the National Security Agency (NSA) intercepting and implanting surveillance functionality into Cisco equipment going overseas.

In wake of the photos, Cisco CEO John Chambers sent a letter to President Obama, asking him to curb NSA surveillance. At the Cisco Live event last week in San Francisco, Chambers said there was "no proof nor was there any indication that Cisco was involved" with the NSA's interception of Cisco gear. He also said he felt a "sense of urgency" to reach out to the White House, fearing that NSA surveillance could destroy customers' trust in the global IT supply chain.

Chambers said the Obama administration "was extremely professional, very supportive, and very open" in response to his letter.

Peter Belyea, president of Teracai, a North Syracuse, N.Y.-based Cisco partner, said his customers in the U.S. have not expressed any concerns over using Cisco equipment.

"We have not had any customers, either in the SMB space or even in the enterprise space, raise that as an issue today," Belyea told CRN. "I think it's business as usual for now. We have not seen anything tangible that would lead us to believe that there is any area for concern."

China's accusations against Cisco come as tension continues to brew between the U.S. and China over allegations of cyberespionage. Last week, the U.S. government indicted five Chinese military officials for allegedly hacking into the networks of major U.S. organizations, including the U.S. Steel Corp. and Westinghouse Electric.

China, for its part, also fired back this week with a government report detailing what it dubbed the U.S.' "unscrupulous secret surveillance programs." The report heavily referenced the leaked NSA documents from former NSA contractor Edward Snowden.

"As a superpower, the United States takes advantage of its political, economic, military and technological hegemony to unscrupulously monitor other countries, including its allies," said the report, authored by China's Internet Media Research Center. "The United States' spying operations have gone far beyond the legal rationale of "anti-terrorism" and have exposed its ugly face of pursuing self-interest in complete disregard of moral integrity."

Cisco isn't the only U.S. technology giant China is singling out. A report from Bloomberg News on Tuesday said that Chinese government agencies, including the People's Bank of China, are asking domestic banks to replace IBM servers with equipment from local vendors. The report, which cited sources familiar with the matter, said the Chinese government wants to ensure IBM servers aren't compromising China's financial security.

An IBM spokesperson said the company was unaware of any order being issued in China.

"IBM is not aware of any Chinese government policy recommending against the use of IBM servers within the country's banking industry. In fact, news reports now state that China's National Development and Reform Commission has not heard of any alleged directive to that effect. IBM is a trusted partner in China and has been for more than 30 years."

Meanwhile, Chinese networking company Huawei has faced continued scrutiny from the U.S. government, which in 2012 labeled the vendor a "national security risk," alleging Huawei equipment could serve as a back door for the Chinese government to spy on U.S. communications.

Huawei in response said last year that it will retreat from the U.S. carrier market, but told CRN it will continue with its U.S. enterprise business.

PUBLISHED MAY 28, 2014