The Chinese government has set up an investigation into the operations of IBM, Oracle and EMC in the country, over "security issues" following the Prism spying revelations.
Reuters reports that China's Ministry of Public Security and a "cabinet-level research centre" have launched the probe, after US National Security Agency (NSA) contractor Edward Snowden claimed the US had hacked into critical network infrastructure at universities in China and Hong Kong.
The official Shanghai Securities News quoted an anonymous source as saying, "At present, thanks to their technological superiority, many of our core information technology systems are basically dominated by foreign hardware and software firms, but the Prism scandal implies security problems."
IBM, Oracle and EMC have so far not commented on the probe, which comes after a slight thaw in relations after cyber-security talks between China and the US in Washington last month.
China has been repeatedly accused by the US of hacking into the networks of American companies and research facilities, but the Prism scandal has given the Chinese plenty of ammunition to fire back.
After last month's Washington talks, China's official Xinhua news agency said, "The two sides held candid in-depth discussions on cyber-security, including the mechanism of a bilateral cyber working group, international cyberspace rules, and measures to boost dialogue and cooperation on cyber-security."
Xinhua said both sides had agreed to "play a positive role in enhancing mutual trust, reducing mutual suspicion, managing disputes and expanding cooperation."