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

[InfoSec News <alerts () infosecnews org>]

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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