Money & Business

U.S. Firms in China Being Hurt by Data Theft, Chamber Survey Finds

By Daniel Ford / Apr 1, 2013 (iStockphoto/Thinkstock)

Twenty-six percent of the members of the American Chamber of Commerce in China said they have experienced a data breach and that the issue “poses a substantial obstacle for businesses in China.”

More than a quarter of the members of the American Chamber of Commerce in China have experienced data theft, according to its 2013 Business Climate Survey.

We oppose the presumption of guilt, without thorough investigation and solid evidence.

In the survey conducted by the U.S. business lobby, 26 percent of respondents said that they had “experienced the breach or theft of data and/or trade secrets from their China operations” and that the issue “poses a substantial obstacle for businesses in China.”

Only 10 percent of respondents would consider using China-based cloud computing services, which is being pushed by the Chinese government. For those who would not consider using the cloud in China, the main reason is worries over data security.

The survey also found that the overwhelming majority of the organization’s members believe the problem of data security in China is staying the same or getting worse. More than 40 percent of respondents said the risk of a data breach is increasing, 53 percent said it’s staying the same, and only 5 percent said it is decreasing.

China’s government has consistently denied engaging in hacking and was quick to reply to the report.

“We oppose the presumption of guilt, without thorough investigation and solid evidence,” said Beijing’s foreign ministry spokesman Hong Lei in a news report. He also called for the U.S. to stop politicizing the issue and “hyping” cybersecurity concerns.

Data theft has been a sore subject in the trade relationship between the United States and China.

A U.S. security firm released a study in February that claimed the Chinese military stole “huge amounts of data” from more than 110 companies and organizations in the U.S. since 2006.

“Cyberattacks are anonymous and transnational, and it is hard to trace the origin of attacks, so I don’t know how the findings of the report are credible,” the foreign ministry spokesman said in response in a Wall Street Journal report.

Other highlights from the American Chamber of Commerce in China survey include:

  • 33 percent of respondents plan to increase investments in China at a slower pace because of an “expectation of slower growth in China or existence of faster growing markets in other geographies.” The second- and third-ranked reasons were “market access barriers or government policies that disadvantage foreign companies in your sector” and “concerns about uncertain policy environment.”
  • The number of those who said that theft of intellectual property causes material damage to China operations rose 12 percentage points, to 34 percent. The percentage of those who reported material damage to global operations also rose, to 14 percent, up from 10 percent.
  • More than half of the respondents said that censorship was hurting their business in some way. The number of respondents who said internet censorship “negatively impacts” their company’s ability to conduct business in China more than doubled, from 7 percent to 16 percent.
  • 62 percent of respondents reported that blocking of search engines makes it more difficult to conduct business.

Daniel Ford

Daniel Ford is a contributor to Associations Now. More »

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