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December 18, 2015

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Chinese firms in cyber security deals

CHINESE IT companies are taking action to defend the country against the risk of cyber attacks seen as an increasing threat to national security.

China Electronics Technology Group Corp yesterday signed a memorandum with Microsoft to form a joint venture that will create a secure Windows-based operating systems for Chinese government bodies and state-owned enterprises.

The CETC will hold a 51 percent stake in the venture with registered capital of US$40 million.

“The new company will dedicate itself to improving China’s software R&D capabilities and helping safeguard the country’s cyber security,” according to a joint statement.

In a separate deal, CETC will cooperate with Russian anti-malware company Kaspersky Lab to deal with computer viruses.

They will also work together on cloud computing, big data and factory control systems, according to the statement.

The agreements were signed on the sidelines of the World Internet Conference in Wuzhen, where cyber security is one of the most discussed issues.

Customer data, internal records and intellectual property owned by energy, retail, technology and engineering enterprises are the most targeted, according to global accounting firm PricewaterhouseCoopers.

From January to September, more than 1,600 cyber security warnings were issued by the National Computer Network Emergency Response Technical Team Coordination Center, a national computer monitoring center.

“This year, major network security breaches have become more frequent and increasingly serious due to technological advances, which calls for upgraded emergency responses to safeguard our country’s cyber security,” said Yun Xiaochun, CNCERT’s chief engineer.

Other Chinese tech companies are also moving to make cyber space safer.

China Electronics Corporation, another state-owned IT giant, exhibited its latest products, ranging from operating systems to CPUs, at the conference.

“We want to create products to cover the whole industrial chain, not just in one or two areas,” said Liu Liehong, its general manager, adding that the company is helping the government figure out a top-level design for a secure Internet system.

“Chinese companies need to make breakthroughs both in software and hardware,” said Zuo Xiaodong, vice president of government think tank the China Information Security Research Institute. “Without domestically created hardware, it’s like building a castle on sand,” he said.

The need to contain cyber security risks creates business opportunities for smaller private companies.

Fan Yuan founded information safety firm DBAPP Security in 2007.

Boasting advanced cyber risk detectors, DBAPP Security was employed by the government to work for the 2008 Beijing Olympic Games and now for the WIC.

“We invested a lot in R&D. We believe only continuous innovation can defeat increasing cyber attack attempts,” said Fan.

“In the closely connected cyberspace, nobody can ward off security threats. Cooperation is the only way out,” said Cao Shiquan, president of People’s Public Security University of China.



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