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US Technology Companies Face Challenges in China Following Spy Scandal

U.S. technology companies including Cisco Systems Inc, International Business Machines Corp and Microsoft Corp may face new challenges selling their goods and services in China as fallout from the U.S. spying scandal starts to take a toll.

IBM last month reported a 22 percent drop in China revenue, leading to a 4 percent decline in its third-quarter profit. Chief Financial Officer Mark Loughridge attributed the company’s problems to the “process surrounding China’s development of a broad-based economic reform plan,” which caused delays in purchases. Microsoft executives singled out China as the company’s weakest performing area in the world during the September quarter in an October 24 earnings call.

In August, the National Development and Reform Commission, China’s top economic planning body, published a statement setting cyber-security standards for financial institutions, cloud computing and big data, information system secrecy management and industrial controls.

Four domestic software and hardware makers, including China National Software & Service Co, announced this month they have received a “top-tier” rating from the Ministry of Industry and Information Technology.

Source: Gadgets.ndtv.com

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