-Caveat Lector-

from:
http://jya.com/cn-p3-peril.htm
<A HREF="http://jya.com/cn-p3-peril.htm">China Sees NatSec Threat in Intel
PIII Serial N
</A>
-----
2 July 1999. Thanks to John Gilmore.



------------------------------------------------------------------------

From: Guangming Daily newspaper, Wednesday, June 30, 1999

Translation by (and thanks to): Anonymous
Ministry of Information Industry (MII) Advises Government Agencies on
Prudent Use of PIII

Follow-up Report on Hidden Perils in Pentium III and Win98


by Our Staff Reporter Yang Gu

Our report on the hidden security perils in Pentium III of Intel and
Win98 of Microsoft has evoked strong reaction from all sides. The
leaders of the information centers of a number of Ministries and
Commissions have written to MII, in the hope of getting its advice and
guidance. Heads of competent departments of MII have convened emergency
meetings of domestic PC manufacturers and information centers of some
Ministries and Commissions, at which they listened to opinions aired by
all sides and discussed relevant policies and measures. Upon widely
soliciting views and getting extensive information, MII will prepare a
report on enhancing security management for electronic information
products.

Administration: PIII sold to government agencies cannot be connected
directly to Internet

In an interview with our staff reporter, the head of the competent
departments of MII said that as the administration, we strongly believe
that national interests are of overarching importance. We must first of
all be responsible for the security of the information systems of
government agencies at all levels, and place high emphasis on the
security dimensions of all kinds of electronic information products
(including hardware and software) and the system itself. We have
conducted serious research and thus acquired a thorough knowledge of
hidden security perils in PIII chips, Win98 as well as servers produced
by different companies. We have also learnt about the response of the
media and American end users toward Processor Serial Number (PSN) of
PIII, including the fact that the U.S. Government is yet to use PIII on
a massive scale. We are of the view that domestic PC manufacturers must
turn off PSN, that such products sold in China must pass the necessary
testing and that PIII machines sold to government agencies should not be
directly connected to Internet. Government agencies at all levels,
including those in such critical sectors as telecommunications, banking,
finance and taxation, and the military must first and foremost turn off
PSN when they buy PIII machines. Even then, computers of this nature
should only be used either in a stand-alone way or on Intranet, and must
never be used for direct Internet connection with the OA network of
government agencies.

We have briefed altogether 13 domestic PC manufacturers on the latest
developments and made clear our views. The domestic PC manufacturers
indicated that since the bombing of the Chinese embassy in Yugoslavia by
the U.S.-headed NATO, they have come to know more clearly the hegemonic
ambitions of the United States. They now feel that safeguarding state
sovereignty and security is the number one priority. The commercial
interests of enterprises are insignificant as compared with national
interests. They were unanimous in fully supporting the decisions made by
the administration.

These domestic PC manufacturers also indicated that the most reliable
way to safeguard information security is to use our own products. If we
have to use imported products, a high degree of prudence and vigilance
should be exercised, rigorous testing conducted, and all the necessary
safeguard measures introduced. These enterprises also provided some
information on hidden security perils in some imported IT products.

Intel Is Yet to Fully Answer Our Inquiry

On 27 May, Intel responded to inquiry about PIII PSN at the request of
MII.

The importance of the Chinese market to Intel cannot be
over-exaggerated. Suppose the annual sales in China is 3 million
processors, Intel would reap an annual turnover of about 3 billion RMB
yuan. If PIII comes across difficulty in China, the company's sales of 3
billion RMB yuan will be affected. Previously, in order to respond to
our staff reporters' questions, Intel has used the service of such
heavyweight figures as the President of Intel China and global marketing
manager for PIII. This time around, in order to better explain to MII,
Intel sent in a more powerful team, including a Vice President from the
headquarters who is also President of Intel Greater China and two
Directors responsible for security matters.

The leaders of the competent departments of MII expressed the view that
as the IT administration of the Chinese Government, MII must see to it
that the IT products manufactured and sold within the territory of China
not threaten national security. At the same time, it must protect the
legitimate rights and interests of the large numbers of ordinary Chinese
users against violations. It hoped that Intel could provide a serious
and credible explanation regarding PIII issues.

Intel briefed on the purpose and role of PSN for PIII.

According to Intel, putting an identification mark on each computer
using PIII can help enhance the security and manageability of the system
as well as manageability of information. It can also serve to improve
functions in authentication, access and tracking, thus enabling
enterprises to have a better knowledge of its resources available. Intel
talked from a technical perspective about the ways to set up, turn off
or access PSN, and explained that PSN is but a number, and that PSN can
be accessed only when software is run locally. End users can control
this function by opting for or against it. PSN will not result in the
access or loss of data on the hard disc or memory. Nor will PSN per se
cause security risks. Intel also confirmed that it had not helped any
organization or agency in adding any other device on PIII, which might
also undermine the security of end users. The two sides conducted
in-depth discussions on the relevant issues. However, Intel has not
fully answered all the questions posed by MII.

Representatives of Users from Various Ministries and Commissions: Set up
a Security Testing Mechanism for IT Products As Soon As Possible

At the MII-sponsored workshop on the security aspects of information
products such as PIII, heads of the information centers of 14 state
Ministries and Commissions expressed their concerns and
suggestions. They believed that security is of utmost importance for IT
products and that imported products naturally have hidden security
perils. Core products such as mainframe, server, processor and firewall
must all be subject to special security testing. The central government
should set up an agency to do the testing. Only when IT products pass
such security testing can they be sold in China. Gradually an
authoritative certification, appraisal and testing mechanism should take
shape. For IT products such as router, firewall and network scrambler,
import should be banned whenever there are domestic alternatives.

In spreading the use of information technology, our long-term goal
should be to accelerate the development of national information industry
through introducing, digesting, assimilating foreign products and
further conducting innovation. Moreover, strong support should be given
to the research and development of IT security products. We should pay
attention not just to network security, but more so to the security of
IT products, because the basis of network and information security lies
in the security and reliability of IT hardware and software.

Up to this day, China has not yet developed its own CPU and operating
system. This is an area where China needs to speed up its efforts. This
should be an act of the Government and represents state will. The
Central Government and the administration must attach great importance
to this work and increase investment. We should vigorously advocate the
use of domestic products for OA systems and wiring-government projects
at all levels. Only then can we break loose from control by others.
Internet and Intranet should be subject to effective security
safeguards. The Central Government ought to promulgate at an early date
its policies for the IT industry, for government procurement, and for
application and equipment.
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris

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