"The environment in China for U.S. technology companies is not very good right now, and this won't make it better," said James McGregor, chairman for advisory firm APCO China. "But if they're losing their intellectual property to cyber hacking they probably see this action as necessary and worrisome."
IBM's China sales have fallen by a fifth or more for three straight quarters, the Armonk, NY-based firm reported in April. Cisco said last week that its China business declined 8 percent in the quarter to April 26.
"There's always a risk of retribution in China," said a person who works closely with U.S. technology firms. "(But) the damage is so pervasive that no company is going to say that the (U.S.) government has acted inappropriately."
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"Companies in any industry seen as a priority for China's industrial policy could be at risk," the person added.
In December, Google, Microsoft and six other U.S. global technology companies called for an overhaul of practices and laws to limit how governments collect user information amid growing concerns about online surveillance.
And last week, Cisco CEO John Chambers wrote to U.S. President Barack Obama calling for "standards of conduct" to ensure that government surveillance doesn't undermine the ability of U.S. technology firms to sell products globally, the Financial Times reported.