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IBM Permits China To Review Source Code (wsj.com)
An anonymous reader writes: IBM has permitted the Chinese Ministry of Industry and Information Technology to review its proprietary source code in a 'controlled' environment, said IBM Senior Vice President Steve Mills yesterday. The company didn't make clear which of its products would be available for review. According to a (paywalled) WSJ report: "IBM has been willing to strike closer partnerships with China’s government than many of its fellow U.S. tech companies, people familiar with the company’s strategy said. Still, it isn’t clear to what extent IBM’s move might be a symbolic gesture. The people briefed on the practice said Chinese officials can look at the code only during visits and can’t remove it for a thorough review. In a short amount of time, it would be extremely difficult to comb through all the code for a product for potential “backdoors” that would allow spying on users."
From a business perspective, this sounds like China wants some assurance that IBM's mainframe software, DB2 and other stuff doesn't have any detectable backdoor code in it. The same thing happened with Microsoft a while back, and other governments including ours audit source code for the same reason.
I think the difference between the US and China in this case is how closely Chinese companies are tied to the government. I doubt there's too much in the way of trade-secret code that a foreign government couldn't reverse engineer given enough time and resources. But, it's much more likely that any information gained will make its way back to state-funded/supported companies in the Chinese environment. IBM isn't stupid, but they probably are greedy, and didn't want to lose access to the Chinese market.
My opinion is that China seems to have the right ingredients in place to be the dominant global player in this century. They have a mix of authoritarian control and an insane focus on economic growth, and are willing to do whatever it takes, popular or not, to achieve their goals. Look at their massive infrastructure build-out during the financial crisis, or their direct intervention in the stock market to fix volatility. We (the US and Europe) aren't there yet, but we'll have to get there at some point.