Corruption in Business: Could China’s cloud computing be used for corrupt acts?

Corruption Report

Title: Corruption in Business: Could China’s cloud computing be used for corrupt acts?

By: Dario Ortega

Cloud computing is a new technology and has been recognized by the Chinese government as a vital piece to the puzzle to be connected for the prosperity of China. However, there are major concerns that China will use this technology to take part in corrupt acts sponsored by the government. By attacking American businesses in particular the Chinese government could impact the United States in a major way.

China has not been able to corner the automobile industry in the past, but it seems to be gearing up to do it any way it can for the future. Cloud computing has the potential to be a useful tool in this venture. This will have grave effects on the American economy. As the United States’ largest automobile provider, GM’s success is vital to the U.S. economy. However, GM’s success depends more on its ability to sell to China – GM’s sells in China rose a respectable 8 percent from 2011 to 2012, while they decreased by 3 percent in North America during the same time. China has its eyes set on the automobile market, but has no way of competing with its American partners any time soon. China’s automobile models are imported mostly by third-world countries, its largest importer being Algeria. Even the Chinese people prefer the foreign models to a domestic model, creating a domestic automobile market where foreigners rule. This ‘open’ market is hard to turn its back on despite the dangers posed by Chinese industrial espionage or close government-business connections. With the addition of cloud computing, economics once again overpowers security in the business realm. Cloud computing has the potential to seriously damage foreign businesses in China. This can include the American stronghold on China’s automobile market. 

But can cloud computing really change all that? The answer is yes. The illegitimate business practices practiced by Chinese businesses will not cease if GM data is transferred and processed in one location. On the contrary, if GM uses cloud services its ability to protect its property will decrease tremendously. Cloud computing brings more threats than just bribing senior executives, it entrusts data access codes and security codes to an outside source which

must retain them in order to properly provide a service. With all this power at the disposal of a cloud service provider such as Huawei – a Chinese company with ties to the Chinese government— the financial security of GM could be at stake. If GM is threatened, it could be argued by some that the U.S. economy itself is threatened, which in turn threatens U.S. national security. Evidenced by previous actions and the potential of exploiting the power entrusted in China by using their cloud computing services, it is essential that GM and other major U.S. companies operating in China take great precaution in conducting their business using cloud computing from Chinese service providers.

            The Chinese government is definitely capable of receiving this information through informal channels considering the nature of business in China in respect to the government. Huawei’s current CEO has been a Communist Party member since the early 1970s and was a member of the People’s Liberation Army (PLA). Huawei also provides military technology to the PLA. If these connections can lead to a barrage of corrupt acts on the part of the government to bring down a U.S. company that could hurt the U.S. economy is all in the realm of thought, however not fantasy.

Sources:

Bennet, Jeff. “U.S., China Keep GM Rolling,” The Wall Street Journal, February 14, 2013.            Accessed May 26, 2013. <http://online.wsj.com/article/SB10001424127887323478004578303691542781414.html>

“Cyber Security and Reliability in a Digital Cloud,” The United States Department of Defense, Defense Science Board, January 2013, Accessed June 1, 2013. <https://docs.google.com/a/coyote.csusb.edu/viewer?a=v&pid=gmail&attid=0.1&thid=3eec963b987c557&mt=application/pdf&url=https://mail.google.com/mail/u/0/?ui%3D%26ik%3D37c14ee32b%26view%3Datt%26th%3D13eec963b987c557%26attid%3D0%26disp%3Dsafe%26realattid%3Dda68aab6004269c7_0.1%26zw&sig=AHIEtbRR3Yz9N16wVLaEjKDSM9ufubQEA>

Young, Angelo. “GM, Ford, VW Dominate China's Auto Industry: Why Can't Chinese Companies Like SAIC, Dongfeng, Geely, And GAC Make Cars That People Want To Buy?” International Business Times, March 15, 2013. Accessed May 26, 2013. <http://www.ibtimes.com/gm-ford-vw-dominate-chinas-auto-industry-why-cant-chinesecompanies-saic-dongfeng-geely-gac-make#>