Chinese state ban on foreign equipment comes to light

Chinese state ban on foreign equipment comes to light

All Chinese government offices and public institutions have been given three years to switch all foreign-made computer hardware and software with domestically-produced alternatives.

According to the Financial Times, the order was given by the Chinese Communist party’s Central Office earlier this year. While the policy is confidential, employees of two cybersecurity companies confirmed to the paper that their government clients had mentioned the directive. They spoke on condition of anonymity. The policy is the first such targeted government edict to be revealed publicly.

The specific focus on overseas firms – which will include manufacturers such as Dell, HP and Microsoft – can be read as a reaction to the US government’s efforts to discourage the use of Chinese equipment, via both export bans and exerting pressure on allies. The revelation of Beijing’s decision will likely foment concerns of supply chains between the US and China being cut.

Washington has banned US firms from using equipment from China’s Huawei, so the Chinese government’s decision is not entirely surprising - the country is pushing for great technological self-sufficiency, and mandating domestic adoption would provide support to the firm and its fellow manufacturer ZTE as they face adversity overseas.

Paul Triolo of the consultant Eurasia Group noted that the US hostility increased the need for urgency, saying: “The goal is clear: getting to a space largely free of the type of threats that ZTE, Huawei, Megvii, and Sugon now face.”

The broker China Securities estimated that between 20 million and 30 million devices would need to be switched out under the initiative, with replacements scheduled to start next year. The policy has been dubbed “3-5-2”, as 30% of devices are expected to be switched next year, followed by 50% in 2021 and 20% the following year.

Hardware may not be the real sticking point, particularly as government offices already use Lenovo computers following the Chinese firm’s acquisition of IBM’s personal computer unit. Software is more likely to present challenges as US-made operating systems, such as Microsoft’s Windows and Apple’s macOS, are both widespread and popular with developers.

Chinese-developed systems such as Kylin OS have a much more restricted ecosystem and far fewer developers creating compatible programmes. Even the definition “domestically-made” presents issues as Chinese firms such as Lenovo frequently use components made by foreign companies such as Intel and Samsung.

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