China ordered its state-owned companies to remove US software

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China ordered its state-owned companies to remove US software

The Chinese Communist Party ordered all government agencies to remove foreign hardware and software within three years. Such measures could harm large American companies, including Microsoft, Dell and HP..

China ordered its state-owned companies to remove US software

The program was named «3-5-2», since technology replacement will occur in the format of 30% in 2020, 50% in 2021 and 20% in 2022. According to analysts, China needs to replace 20 million to 30 million units of foreign equipment..

According to China Securities, the order came from the central office of the Communist Party earlier this year..

Neil Campling, head of technology, media and telecommunications research at Mirabaud Securities, said the move by the Chinese government is designed to protect against US action..

Beijing’s measures are driven by the ongoing US-China trade war in which technology is at the center of attention. China’s tech companies have been targeted by Western pressure. Earlier this year, Huawei was placed in a U.S. blacklist that restricted the actions of U.S. firms doing business with the Chinese telecommunications network giant.

China ordered its state-owned companies to remove US software

Washington expanded this list in October to include more Chinese organizations such as Hikvision. The provision of U.S. law known as the national defense authorization law, also prohibits executive government agencies from purchasing telecommunications equipment manufactured by Huawei and ZTE.

The current policy of the Celestial Empire can be seen as a direct step against the US tech market.. Experts believe that the further course of trade negotiations will greatly depend on the US reaction to the latest measures from China..

«Discrimination against foreign technology has been part of the political framework in China for many years, and the US has long been aware of it. However, this could complicate discussions around Huawei, ZTE and other companies in terms of their access to the US market.», – says Nick Marro of The Economist Intelligence Unit.

Beijing’s directive to remove foreign hardware and software may face a number of challenges. Although a company like Lenovo is Chinese, it uses chips from an American supplier Intel. China does not currently have its own Windows alternative. Huawei has released its operating system called Harmony OS earlier this year, but it is not yet clear if it will be suitable for government use.

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