U.S. technology companies including Cisco Systems, International Business Machines (IBM) and Microsoft may face new challenges selling their goods and services in China as fallout from the U.S. spying scandal starts to take a toll. “All the big U.S. IT companies are concerned,” said Jim Lewis, Senior Fellow with the Center for Strategic Studies in Washington, who is an expert on China and technology. “But so far Cisco is bearing the brunt of it.” IBM reported last month a 22% drop in China revenue and Microsoft executives singled out China as the company’s weakest performing area in the world during the September quarter. Although Beijing has not prohibited state firms from purchasing Western-made technology services and equipment, the government has sent a clear message to choose Chinese-made equipment first, executives based in the country say. “The government’s signal is pretty clear – they want to rely less on U.S. products, such as those from IBM, Oracle and EMC,” said a former China-based telecommunications executive. Four domestic software and hardware makers, including China National Software & Service, announced this month they had received a “top-tier” rating from the Ministry of Industry and Information Technology (MIIT). Cisco Chief Financial Officer Frank Calderoni said the company was most affected by a political backlash in China but noted that it was difficult to quantify how much of its revenue shortfall was due to politics versus macro-economic trends.