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China's net software could do harm

TEXT OF STORY

Renita Jablonski: Starting Wednesday, all computers sold in China -- including those made by U.S. manufacturers --- are supposed to be equipped with new Internet-filtering software. The Chinese government says it will stop people from surfing dirty Web sites. Critics say Beijing actually wants to spy on Chinese PC-users and block them from political Web sites. A trade spat over the technology may be brewing, as Mitchell Hartman reports.


Mitchell Hartman: The software's made by an obscure Chinese company. Analysts who've looked at the code say it's not just intrusive -- it's lousy.

Danny O'Brien: It's not a particularly well-written piece of software. It has a lot of security flaws.

Danny O'Brien of the Electronic Frontier Foundation says it'll let Chinese spooks monitor millions of Chinese PCs and give cyber-thugs everywhere a piece of the action.

O'Brien: Spammers and other fraudsters will be able to use this as a platform to launch attacks all over the world.

That's bad news for U.S. companies like Dell and H-P that have to stick this software on their brand-name computers. But analyst David Vorhaus of the Yankee Group says they don't have much choice.

David Vorhaus: It's a PR nightmare, but at the same time they can't afford to be forsaking the Chinese market.

U.S. officials are sounding off, calling this "unjustified" and a "serious barrier to trade." But, Vorhaus says:

Vorhaus: They're not going to shut down U.S.-China trade. That would be foolish.

He says there could be limited trade sanctions, along with demands the Chinese FIX the software, making it less oppressive and open to cyber-attack.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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