The American tech giant revealed last week that a hacking group called Hafnium exploited Microsoft Exchange and was able to gain access to computers. The company said the group is “assessed to be state-sponsored and operating out of China.”
Microsoft entered China in 1992 and for decades has counted on its influential research lab — Microsoft Research Lab Asia — to help it build influence. Its software is used by the Chinese government and companies, and Bing is the only foreign search engine with any traction in China.
“Microsoft not only has a history in China, but a longer history of grappling with state-linked cyber threats,” said Peter Singer, a strategist and senior fellow at New America Foundation with expertise on cybersecurity and foreign policy.
Billionaire co-founder Bill Gates has visited China more than a dozen times since the 1990s, and once even hosted former Chinese President Hu Jintao at his home in Washington state.
Chinese Foreign Minister Wang Yi praised the former CEO as an “an old friend of Chinese people” in 2018, and President Xi Jinping wrote to Gates last year to thank him for his support in fighting Covid-19.
Challenges in China
The company faces challenges in China, though.
Allegations of piracy have long generated heated debate within China, including frequent pushback from the Chinese government. One prominent government scientist, Ni Guangnan with the Chinese Academy of Engineering, even once claimed in a 2018 interview with Chinese state media that Microsoft “deliberately” allowed the use of pirated products so locally made operating systems wouldn’t gain traction.
“It seems Microsoft is still expanding in China, including cooperation on data management and cloud cybersecurity,” said Winston Ma, an adjunct professor at New York University and a former managing director at China Investment Corp., a Chinese sovereign wealth fund.
— Alex Marquardt, Zachary Cohen, and CNN’s Beijing bureau contributed to this report.
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