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| China's scandals get worse
May 19, 2006
Lenovo's State Dept setback
With right-wing critics in the GOP putting pressure on the State Department because of a deal to buy thousands of computers from China’s Lenovo, the Bush Administration has decided to split the difference. The purchase of 16,000 desktops, announced in March, will proceed. But State announced yesterday that the Lenovo machines will be used only for run-of-the-mill, non-classified systems. According to Reuters, Republican congressman Frank Wolf, the Beijing crtitic who led the opposition to State’s Lenovo deal, saw red after learning how the government had been planning on using the PCs: "I was deeply troubled to learn that the new computers were purchased from a China-based company, and that at least 900 of these computers were planned to be used as part of the classified network deployed in the United States and around the world in embassies and consulates.” Presumably those 900 PCs will now be Dells or HPs.
Although the sale itself isn't cancelled, the announcement nonetheless is a setback. And one that must be especially distressing to Lenovo and its chairman, Yang Yuanqing, since the company has been trying so hard to establish an American identity since taking over the PC division of IBM last year. Lenovo has launched a big push to win more American customers, especially small and midsized companies. (More on this here.) Lenovo headquarters is now in Westchester, not in Beijing, and Yang says that New York is now his home.
Lenovo says there’s no reason for the American government to be concerned. "We know these computers present no security risk because they do not have back doors and they do not have surveillance software tools installed on them," Jeff Carlisle, Lenovo's vice president of government relations, told Reuters. It’s interesting that he uses the term “back door.” In Sino-American tech disputes, it’s usually the Chinese government, not the American government, that’s worried about secret passageways that provide foreigner spies with access to its computers. Two years ago, when Beijing tried to mandate that a locally-designed WiFi-like standard be the only one permitted for use in China, the idea was to prevent foreign technology – and the back doors contained therein - from getting a foothold. And Microsoft has struggled for years to overcome the fear among Chinese leaders that the Windows operating system provided back doors to the CIA. Now it’s a Chinese company’s turn to deal with worries about security.
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