1st LD-Writethru-China Focus: Tech firms cooperate to address cybersecurity risks

Chinese IT companies are acting to defend their country against cyber attack risks, which are increasingly a threat to national security.

China Electronics Technology Group Corporation (CETC) signed a memorandum with Microsoft on Thursday to form a joint venture that will create a secure Windows-based operating systems for Chinese government organs and state-owned enterprises.

The CETC will hold a 51-percent stake in the venture with registered capital of 40 million U.S. dollars.

"The new company will dedicate itself to improving China's software R&D capabilities and helping safeguard the country's cybersecurity," according to a joint statement.

In a separate deal also on Thursday, the CETC will cooperate with Russian anti-malware company Kaspersky Lab to deal with computer viruses.

They will also work together on cloud computing, big data and factory control systems, according to the document.

Kaspersky Lab CEO Eugene Kaspersky said he will do his best to work with the CETC and Chinese government organs.

The two agreements were made on the sidelines of the ongoing second World Internet Conference (WIC), where cybersecurity is one of the most discussed issues.

With the world's largest population of Internet users, China is exposed to various cybersecurity risks.

Chinese companies tackled an average of 1,245 information safety cases in 2015, a 517-percent year-on-year increase, PricewaterhouseCoopers said earlier this month.

Customer data, internal records and intellectual property owned by energy, retail, technology and engineering enterprises were the most targeted, according to the global accounting firm.

From January to September, over 1,600 cybersecurity warnings were issued by the National Computer Network Emergency Response Technical Team Coordination Center (CNCERT), a national computer monitoring center.

"This year, major network security breaches have become more frequent and increasingly serious due to technological advances, which calls for upgraded emergency responses to safeguard our country's cyber security," said Yun Xiaochun, chief engineer with the CNCERT.

In addition to the CETC, other Chinese tech companies are also moving to make the country's cyberspace safer.

China Electronics Corporation (CEC), another state-owned IT giant, exhibited its latest products ranging from operating systems to CPUs at the WIC.

"We want to create products to cover the whole industrial chain, not just in one or two areas," said CEC General Manager Liu Liehong, adding that the company is helping the government figure out a top-level design for a secure Internet system.

"Chinese companies need to make breakthroughs both in software and hardware," said Zuo Xiaodong, vice president of the China Information Security Research Institute, a government think tank.

"Without domestically-created hardware, it's like building a castle on sand," he said.

The need to contain cybersecurity risks also creates business opportunities for smaller private companies.

Fan Yuan founded information safety firm DBAPP Security in 2007, when he came back to China from Silicon Valley in the United States.

Boasting advanced cyber risk detectors, DBAPP Security was employed by the government to work for the 2008 Beijing Olympic Games and now for the WIC.

"We invested a lot in R&D. We believe only continuous innovation can defeat increasing cyber attack attempts," said Fan.

DBAPP Security is now working with Alibaba to protect customer data safety.

"In the closely connected cyberspace, nobody can ward off security threats. Cooperation is the only way out," said Cao Shiquan, president of People's Public Security University of China. Endi