Economy

Too smart by half

Why IBM’s Smarter Planet has the Chinese government concerned

Big Blue is giving Beijing the blues

It can cut pollution and create jobs, two key objectives for China’s leaders. It can even put an end to traffic congestion. At least that seems to be the message IBM is sending Beijing with its ‘Smarter Planet’ range of IT solutions. So why are the Middle Kingdom’s mandarins, usually so eager to get hold of new technology, now hesitating?

According to IBM, advances in software design now allow for new networks of smart grids, sensors and digital controls across a range of applications. That means software that can detect leaky water pipes, trace tainted food back to source or make the trains run on time.

Much more can be done with the information that Smarter Planet’s solutions provide. Perhaps that’s the point: information is power, after all, and officials may not be keen on sharing it out too widely. “Nobody ever got fired for buying IBM” is the old cliché, but it seems that few in China are willing to test out the hypothesis. They want the data, of course. They just don’t want anyone else to have access to it.

Li Yizhong, minister of Industry and Information Technology, worries the software is a Trojan horse: “The US tries to use its information network technology, for things as small as controlling one computer or one generator, and as large as controlling a whole industry, to control every country’s economy.” His comments echo a report recently published by his ministry.

“Regarding these new ideas and strategies from abroad, we must be inspired and vigorously develop strategic emerging industries,” explained Li, “but we must also raise our vigilance and cannot fall under the control of anyone.”

IBM – which has worked on some green tech solutions for the city of Shenyang – has been diplomatic in response, simply agreeing that “paying close attention to security issues makes sense”. Nonetheless, company executives won’t have missed the irony in their situation. Recent efforts by the Indian government to limit usage of Chinese telecom equipment (also over security fears, see WiC 30) were loudly denounced as “discriminatory” and “unfair” in China.

China has strict (and some say rather poorly defined) rules on the ‘possession of state secrets’, and Beijing can be sensitive about information that might elsewhere be considered relatively benign. Although finally convicted of bribery, Stern Hu and his Rio Tinto colleagues were initially charged with procuring state secrets, for instance. Yet some of the information in their possession came from a government website. And new rules could see Google forced to disable its Google Maps service in China. It has until the end of the month to secure a licence.

Though national security may have caught the headlines, it isn’t the government’s only concern. The Economic Observer has argued, for instance, that a ‘closed system’ for the most sensitive data captured through Smarter Planet solutions would eliminate any security threat. Instead, the newspaper suggests that there are financial misgivings about committing to foreign-owned technologies. “China would lose huge financial resources by buying IBM’s high value-added products, which would seriously undermine China’s efforts to support domestic enterprises,” it concludes.

No doubt the government will be considering the costs of missing out on Smarter Planet’s benefits. If IBM is stymied in China, domestic companies may miss out on the chance to capitalise on the technology, and better tackle pollution and waste. Smarter Planet may throw up a few unwelcome findings for officials. But, in the long run, greater transparency can only help the bureaucrats to formulate better policy.


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