Chinese Government Phasing Out Foreign Hardware, Software

Chinese Government Phasing Out Foreign Hardware, Software

The Chinese government told Chinese government offices and public institutions that they need to remove all foreign software and computer equipment within three years, according to a report by the Financial Times.

As per the government directive, Chinese buyers must replace all existing foreign computer equipment within the next three years, a first such public instruction in the country.

News of the directive comes after the Trump administration moved in May to restrict United States companies from doing business with the Chinese telecom giant Huawei. On the same grounds, the White House pressured its allies in Europe and beyond to deny Huawei entrance to their 5G networks. The plan will target another 50 percent of the equipment in 2021, and the remaining 20 percent will be replaced in 2022. As per their estimates, the Chinese directive necessitates replacement of 20 mn to 30 mn pieces of hardware beginning next year.

The US has also blacklisted other Chinese technology firms implicated in human rights abuses of Muslim minorities in China's Xinjiang region. Unlike previous pushes for self-sufficiency, recent U.S. sanctions have added urgency to the project, said analyst Paul Triolo of consultancy Eurasia Group.

China internally refers to the policy as "3-5-2" which is indicative of the pace at which replacements will be carried out. But government agencies are responsible for only part of it, with private companies unlikely to switch to domestic products voluntarily, one cybersecurity analyst opined.

The situation with PCs also remains unclear - the biggest Chinese producer of computers, Lenovo, is indeed capable of delivering domestically-assembled PCs to the government since it fully acquired IBM's personal computer business in 2005.

But analysts say that it will be hard to replace software with domestic alternatives, since most software vendors develop products for popular US-made operating systems such as Microsoft's Windows and Apple's macOS.

China's homemade operating systems, such as Kylin OS, have a much smaller ecosystem of developers producing compatible software.

The impact of the 3-5-2 policy could be significant since the government can control procurement for the agencies covered under the policy, another cyber security analyst said.

Related Articles