U.S. security software maker Symantec said its products are not banned by the Chinese government after Chinese media reported that the government’s procurement agency has excluded the company from a list of approved anti-virus vendors.

The state-controlled People’s Daily said on its English Twitter feed on Sunday that the agency has excluded Symantec and Russia’s Kaspersky Lab from a list of security software suppliers.

“It is important to note that this list is only for certain types of procurement and Symantec products are not banned by the Chinese government. We are investigating this report and will continue to bid for and win government projects in China,” a Symantec representative told Reuters.

Shares of Symantec were up about two percent at $23.63 in midday trading on the Nasdaq on Monday.

Symantec said last month it was in talks with Chinese authorities following reports that China had banned use of one of its products, data loss prevention software. At the time, a Symantec spokeswoman said that there was no indication of a ban on the company’s flagship anti-virus software programs.

“We can see this becoming a more contentious issue over the coming months,” FBR Capital Markets analyst Daniel Ives told Reuters.

“It’s another headwind for the company as Symantec already faces numerous challenges to show growth again. China remains a headache situation for Symantec as well as other U.S. tech providers across the board.” Ives said.

The government procurement office also tweeted that it had approved the use of five anti-virus software brands, all from China: Qihoo 360 Technology, Venustech, CAJinchen, Beijing Jiangmin and Rising.

The report is the latest sign that Beijing is intent on promoting use of domestic information technology products after revelations about the extent of U.S. spying activity by former NSA contractor Edward Snowden, and the recent indictment of five Chinese military officers on hacking charges have also soured sentiment against U.S. tech corporations in the country.

Chinese technology corporations like Huawei Technologies and ZTE have grown into sophisticated global conglomerates in past years, and some analysts speculate that Beijing is promoting its local industry standard-bearers on its own home turf at the expense of U.S. corporations.

Chinese state media have lashed out at Google, Apple and other U.S. technology companies, calling on Beijing “to punish severely the pawns” of the U.S. government for monitoring China and stealing secrets.

Chinese media reported in May that authorities had banned government use of Windows 8, the current version of Microsoft’s operating system for personal computers.

Cisco Systems and IBM are among the Western companies that have reported flagging sales this year in the world’s largest telecoms and Internet market by users.

(Reporting by Soham Chatterjee in Bangalore and Jim Finkle in Boston; Editing by Maju Samuel)




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