(Adds Kaspersky and analysts' comments)
By Soham Chatterjee and Jim Finkle
Aug 4 U.S. security software maker Symantec Corp
and Russia's Kaspersky Lab downplayed a move by Beijing
to exclude them from a list of anti-virus vendors whose products
are approved for sale to central government agencies in China.
The People's Daily, the official newspaper of the ruling
Communist Party, said on its English Twitter feed on Sunday that
the government's procurement agency has excluded Symantec and
Kaspersky from a list of security software suppliers.
Kaspersky confirmed on Monday that authorities in Beijing
had moved to restrict government purchases of software from
"Chinese Central Government Procurement Center temporarily
rescinded its endorsements of all foreign security providers,"
Kaspersky spokeswoman Susan Rivera said.
"However, this restriction only applies to national-level
institutions whose funding comes from the central government
procurement budget, and does not include regional governments or
Symantec said in a statement that the list referred to in
Chinese media reports only affected some types of products.
"It is important to note that this list is only for certain
types of procurement and Symantec products are not banned by the
Chinese government," the statement said. "We are investigating
this report and will continue to bid for and win government
projects in China."
Shares of Symantec closed up 1.7 percent at $23.56 on the
Nasdaq on Monday. The Nasdaq Composite Index rose 0.72 percent.
The People's Daily also tweeted that it had approved the use
of five Chinese anti-virus software vendors: Qihoo 360
Technology Co, Venustech, CAJinchen, Beijing Jiangmin
FBR Capital Markets analyst Daniel Ives said he sees the
development becoming a more contentious issue over the coming
"It's another headwind for the company as Symantec already
faces numerous challenges to show growth again. China remains a
headache situation for Symantec as well as other U.S. tech
providers across the board." Ives said.
Symantec said last month it was in talks with Chinese
authorities following reports that China had banned use of one
of its products, data loss prevention software.
Sunday's report is the latest sign that Beijing is intent on
promoting use of domestic information technology amid concerns
about U.S. spying and the indictment of five Chinese military
officers on cyber espionage charges.
Still, Eric Johnson, dean of the business school at
Vanderbilt University and an expert on cyber security issues,
said the Chinese government's move is only a "symbolic one" and
will have "little meaningful impact" on Symantec.
Chinese technology corporations like Huawei Technologies Co
Ltd and ZTE Corp have grown into
sophisticated global conglomerates in past years, and some
analysts speculate that Beijing is promoting its local industry
standard-bearers on its own home turf at the expense of U.S.
Chinese state media have lashed out at Google Inc,
Apple Inc and other U.S. technology companies, calling
on Beijing "to punish severely the pawns" of the U.S. government
for monitoring China and stealing secrets.
U.S. tech companies such as Microsoft Corp and
Qualcomm Inc have recently faced anti-trust
investigations, while IBM Corp and Cisco Systems Inc
have reported declining sales in China.
(Additional reporting by Subrat Patnaik and Abhirup Roy in
Bangalore; Editing by Maju Samuel)