[ISN] The Escalating US-China Spying War Is McKinsey’s Loss and Huawei’s Gain

http://www.nextgov.com/cybersecurity/2014/05/escalating-us-china-spying-war-mckinseys-loss-and-huaweis-gain/85216/ By Heather Timmons Government Executive May 27, 2014 US consultants may be the next victim of the US and China’s escalating battle over cyber-spying. Chinese officials have asked state-owned enterprises to stop employing US consulting companies, the Financial Times reported (paywall), because of fears they are reporting company secrets to the US government. The ban could boost the business of a company once slammed with allegations of spying for the Chinese by the US government. Equipment maker Huawei gave up on the US market after it was unable to convince the US government it was spying for Beijing, but still grew revenues 8.5% in 2013, as business in Europe and Asia grew. The new rules come after Beijing forbid Chinese government offices from using Windows 8 last week and said they would vet imported IT equipment, and the US Department of Justice indicted five Chinese army personnel for stealing corporate secrets from US companies. Also last week, China’s Ministry of Finance proposedthat foreign accounting firms be banned from working on mainland Chinese accounts without a local partner, a move that could be as much about protecting China’s domestic industry as it is spying concerns. The most recent ban could have a wide impact, depending on how Beijing decides to define “consulting.” Wall Street’s big investment banks, after all, advise and consult with numerous state-owned enterprise clients in China on everything from raising money to foreign takeovers. Some of the US’s biggest public relations firms have a big presence China, where they’ve been advising state-owned clients on IPO road shows and presentations to raise foreign capital. […]




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