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