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Pentagon Bans Tech Vendors From Using China-Based Personnel After ProPublica Investigation
(www.propublica.org)
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Cloud computing I agree, at least until we figure out homomorphic encryption.
For cloud storage it's not as bad, as long as you control the keys and the provider doesn't see them then you can be fairly confident the data is safe.
Even then, for cloud storage; cryptography is an additional layer of protection, but all this data should be kept offline as much as reasonably possible.