http://www.chinaonline.com/issues/econ_news/newsarchive/secure/2001/april/C01041352.asp The following content is from the Economist Intelligence Unit, a U.K.-based information provider. (13 April 2001) Internet security poses a growing concern for businesses in the West. A joint survey of corporations, government agencies and organisations conducted by the San Francisco-based Computer Security Institute and the Federal Bureau of Investigation in the US last month found that 85% had experienced Internet security break-ins over the previous year. Of these, 64% resulted in significant financial losses. More than two-thirds of respondents said their website, rather than their internal networks, was a frequent point of attack. Meanwhile, MessageLabs, a UK company that provides Internet security services, has seen its anti-virus system go from catching one a day in 1999 to one every three minutes in 2000 and one every minute in 2001. This February alone, the company dealt with almost 47,000 virus incidents. How about China? Domestic businesses and home Internet users got off comparatively lightly with the LoveBug and Kournikova viruses that paralysed Internet systems in Europe and the US, in part because local companies do not rely heavily on e-mail for day-to-day business communication. But this will change as computer ownership levels overtake those of Japan as the highest in Asia, and Internet usage soars both at home and in the office. The security risk to business operations will increase as China's economy becomes more wired to the international business community. Threats will come not only from outside China. As in other countries, it is China's younger generation that is attracted to computers and the Internet. Many, keen to show off their skills, out of boredom or a desire for fame and money, have the potential to become hackers. And just as these young computer users are increasingly out of touch with traditional China -- particularly the obsolete political jargon of the ruling Communist Party -- so the government itself is struggling to understand the earth-shaking implications of electronic communication and the extreme damage it can inflict on business. Public concerns over general Internet security levels are affecting e- commerce, particularly in the area of online shopping. While a small number of China's online shopping sites can take orders and accept payment online, most consumers continue to rely on a cash-on-delivery (COD) system to take delivery of their goods. The enduring popularity of COD reflects the deep-seated lack of trust in e-commerce security. According to a January 2001 survey by the CNNIC, over 60% of Internet users felt that either Internet security or the quality of their product could not be guaranteed when making online purchases. Consumers are unwilling to hand over personal financial information to companies about whom they know little or nothing. The government, ever keen to boost consumer spending, wants to provide a legal framework to ensure the long-term success of e-commerce. The passing of a new Internet security law by the National People's Congress last month reflects the seriousness with which the authorities are tackling concerns, including those about online payments. The legislation follows the Draft Guidelines for China's E-commerce Development, issued in April 2000. These provide a framework to support commercial laws, intellectual property rights, domain names, privacy and security. Yet enforcement is all. And the central government can achieve little without co-operation at the local level. Some provincial governments have been proactive. Fujian's provincial government in south-eastern China, for example, is conducting a crackdown on computer viruses this month. The operation involves educating PC users about virus prevention and control, and strictly enforcing anti-virus legislation issued last year. For China, more international business means more viruses, and more viruses mean more international business. Symantec of the US, the world's largest maker of computer-security products for consumers, has been in Beijing since 1999. Symantec's priority was to adapt its Norton software to the Chinese market; its most recent release was the Norton AntiVirus 2001 software, which protects the user's computer from hackers as well as viruses sent by e-mail or downloaded from the Web. The Internet security sector is attracting more players. As well as international competition, at least eight local firms have published their anti-virus software. Some foreign firms are opting to partner with existing local operations. Softbank of Japan has entered a four-way joint venture with Trend Micro, a Japanese Internet security firm; ISS (Internet Security Solutions) of the US (www.iss.net); and Internet Security One, a local company. IS-One (www.is-one.net), which is currently investing in the biggest security-testing laboratory in China, specialises in security assessment and intrusion detection technology. Its clients include the largest Chinese financial institutions, communications providers, ISPs and service providers, as well as government agencies. SOURCE: Business China *==============================================================* "Communications without intelligence is noise; Intelligence without communications is irrelevant." Gen Alfred. M. 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