IBM allows China to review source code

International Business Machines Corp has agreed to let China's technology ministry review some product source code in a secure room, according to two people briefed on the practice, making it the first major US tech company to comply with requests from Beijing that the industry has opposed.



IBM has begun allowing officials from China's Ministry of Industry and Information Technology examine proprietary source code -- the secret sauce behind its software -- in a controlled space without being able to remove it from the room, the two people said. It wasn't clear which products IBM was allowing reviews of or how much time MIIT officials can spend looking at the code.



IBM Greater China General Manager Shally Wang referred questions to the company's media-relations office on Friday. An IBM China spokesman didn't respond to requests for comment. Officials at the Chinese ministry didn't respond to a request for comment.



Chinese media reported that IBM Senior Vice President Steve Mills disclosed the source-code sharing in a speech in Beijing Thursday, saying that IBM needed government support to continue its growth in China. Mr Mills' remarks couldn't be immediately confirmed.



China has been pressuring US tech companies to hand over source code for its products to prove there are no security risks, after former US security contractor Edward Snowden disclosed in 2013 that the US government tapped into overseas electronic gear to spy on other governments. US tech firms have grappled with a sales chill in China since then.



Although US tech companies are striking more alliances with state-owned Chinese companies to retain market share, they have largely resisted pressure from Beijing to share source code. Disclosing source code would reveal the companies' core intellectual property and raise the risk that Chinese competitors could copy their products. Earlier this year, under pressure from the US government and trade groups, China's banking regulator suspended the implementation of rules that would force Chinese banks' equipment suppliers to open their source code for review.



IBM has been willing to strike closer partnerships with China's government than many of its fellow US tech companies, people familiar with the company's strategy said. This has caused consternation among some rivals and the Obama administration, as it makes it more difficult for them to take a hard line with Beijing, they said.



It wasn't clear to what extent IBM's source code review is a symbolic gesture, as the people briefed on the practice said Chinese officials can look at the code only during visits and can't remove it for thorough review. In a short amount of time, it would be extremely difficult to comb through all the code for a product for potential "backdoors" that would allow spying on users.





