COMPUTER INDUSTRY CONTEMPLATES RESPONSE TO

UNCLAS SECTION 01 OF 03 BEIJING 001538 SENSITIVE SIPDIS State for EAP/CM - SFlatt, JHabjan State for EEB/CIP - SFlynn, FSaeed USTR for Awinter, JMcHale, TWineland, AMain Commerce for MAC Commerce for ITA - IKasoff, NMelcher DOJ for CCIPS - MDubose and SChemtob FBI for LBryant State for White House OSTP Ambassador Richard Russell NSC for Melissa Hathaway E.O. 12958: N/A TAGS: ETRD PGOV PHUM SOCI SCUL ECON CH SUBJECT: COMPUTER INDUSTRY CONTEMPLATES RESPONSE TO CHINA'S GREEN DAM MANDATE Ref: Beijing 1520 This cable is sensitive but unclassified. Please handle accordingly. ¶1. (SBU) Summary: Emboffs met on June 8 with representatives of several trade associations to further discuss their reactions to the Chinese government's mandate that all computers sold in China after July 1 be preinstalled with "Green Dam" Internet filtering software (reftel). Those present elaborated their technical, security, and political concerns with the program, and confirmed their top priority is to delay the July 1 deadline and seek consultations with responsible Chinese government ministries. Industry thought the most successful tactical approach would be to emphasize security and technical threats posed by the software to Chinese users. For now, though, they are building alliances and engaging Japanese and European colleagues as they await guidance from Washington-based parent organizations, which will meet with State and Commerce officials on June 9. End Summary. ¶2. (SBU) Embassy Economic, PAS and FCS officers met June 8 with members of the U.S. Information Technology Office (USITO),the U.S.-China Business Council (USCBC),and the American Chamber of Commerce (AmCham). Industry further elaborated their member companies' technical, security, and political concerns over China's recent mandate to use "Green Dam" Internet filtering software on all computers sold in China after July 1 (see reftel). The groups also considered which tactical approach would be most effective in persuading the Chinese government to delay its proposed implementation deadline. While attendees recognized that the censorship aspect would raise the profile of the issue in the foreign media and Congress, all agreed that technical and security concerns would be more persuasive to the Chinese. While there was broad agreement on how to proceed (see para 10),industry reps are waiting for guidance from home agencies prior to engaging the Chinese. Waiting for Guidance -------------- ¶3. (SBU) USITO representatives described their evolving position on the Green Dam project as "building alliances without deciding how to react". USITO, USCBC, and AmCham all agreed that they would need clear guidance from their Washington-based parent organizations on how to proceed, but they recognized the importance of preparing for a unified campaign. Such a coordinated response to the MIIT mandate would include not only U.S. industry associations, they said, but also their European and Japanese counterparts, with whom preliminary discussions have already begun. Technical Shortcomings -------------- ¶4. (SBU) USITO reaffirmed reftel assessment that U.S. computer makers are concerned by the many unclear technical details surrounding the implementation of the Green Dam program. Elaborating further, USITO said the stability of the untested software is uncertain, with the potential to create problems for users and networks, in turn requiring increased BEIJING 00001538 002 OF 003 support from PC vendors. They noted several Chinese blogs describe the program as unstable, causing computers to crash, and being deficient in its filtering capabilities. ¶5. (SBU) The ambiguous language of the MIIT circular is also worrisome. For example, it is unclear whether the software should be pre-installed on a computer's hard drive or simply included on a disc in the box, which an apparently well-sourced June 8 Wall Street Journal Online article reported would be an option. That article also reported that the software can be uninstalled by users, a feature USITO sources originally thought unavailable. ¶6. (SBU) Industry observed that such technical issues must be clarified and the software extensively tested before PC makers would be willing to even consider pre-installing it or shipping their computers with the disc in the box. However, they hastened to add that even flawless Green Dam software would not necessarily make the companies comfortable participating in the Green Dam program, given the separate concerns over security vulnerabilities and censorship. Security Vulnerabilities -------------- ¶7. (SBU) Industry representatives further elaborated their companies' concerns over the security vulnerabilities that MIIT's Green Dam mandate could create. First, individual computers could be attacked by hackers via the Green Dam software. Since the software, according to a published user manual, enables parents to remotely access and monitor the activity on their children's computers, the same opportunity would exist for hackers to monitor and control remote computers with malicious intent. Such activity could damage hardware and software and compromise personal information. USITO cited reports online that, in one case, an early user of the software reported that his banking information had been compromised after installing the software. ¶8. (SBU) Another major potential threat comes from the lack of diversity that this government-mandated solution creates in the software industry. A common software application installed on all computers sold in China establishes a common platform for hackers to target, threatening China's underlying network. Software diversity reduces such risks. Political Questions -------------- ¶9. (SBU) Industry representatives agreed that the political concerns related to the Green Dam project are significant. If they were to comply with MIIT's mandate to install the software, the political implications of appearing complicit with China's censorship regime could be very damaging. They agreed that emphasizing publicly Green Dam's new limits on access to information could attract extensive foreign media and Congressional attention. However, from a negotiating perspective, industry representatives thought it would be difficult to appeal to the Chinese government on freedom of information grounds. There was consensus that pursuing a delay in the July 1 deadline based on BEIJING 00001538 003 OF 003 technical and security arguments might be more successful. Next Steps -------------- ¶10. (SBU) All present recognized the urgency to act quickly given the proposed July 1 deadline. USITO representatives noted that MIIT's May 22 circular did not outline any punitive measures for non- compliant companies. While some speculated whether that meant non-compliance would actually have no consequences, all acknowledged that U.S. companies must operate in observance of Chinese laws and regulations - and therefore cannot afford to do nothing and let the deadline pass. They agreed their priority was to push back on the proposed July 1 implementation deadline, and to do so with a unified front. The industry groups proposed they draft a joint letter to relevant Chinese agencies, but will wait for guidance from parent companies. USITO board members reportedly have meetings scheduled on June 9 with EAP/CM Director John Norris and Commerce Acting Undersecretary for International Trade Michelle O'Neill. PICCUTA