Tue, Dec 10, 2019 - Page 5 News List

Beijing bolstering effort to push foreign tech out

Bloomberg

The Chinese government is taking further steps to remove foreign technology from state agencies and other organizations, a clear sign of determination for more independence amid tensions with the US.

Beijing is likely to replace as many as 20 million computers at government agencies with domestic products over the next three years, according to research from China Securities.

More than 100 trial projects for domestic products were completed in July, the brokerage firm said.

The Financial Times newspaper said that the Chinese Communist Party’s Central Office this year ordered state offices and public institutions to shift away from foreign hardware and software.

The government of Chinese President Xi Jinping (習近平) has been trying for years to replace technologies from abroad, particularly from the US.

Bloomberg News reported in 2014 that Beijing was aiming to purge most foreign technology from its banks, the military, government agencies and state-owned enterprises by next year.

The country’s “Made in China 2025” plan also set out specific goals for technology independence, although the policy has been de-emphasized after contributing to trade tensions.

US President Donald Trump’s policies about China and its leading companies have given the effort renewed urgency. His administration this year banned US companies from doing business with Huawei Technologies Co and blacklisted other Chinese firms.

“The trade war has exposed various areas of Chinese economic weakness, which Beijing seems determined to rectify,” Adamas Asset Management managing director Brock Silvers said. “If the decision pushes Trump to finally come down hard with a more forceful ban of Chinese tech, however, China may one day regret having gone so public with its policy so soon.”

While the push is narrow in scope, it is designed as part of the broad, long-standing effort to decrease China’s reliance on foreign technologies and boost its domestic industry.

The goal is to substitute 30 percent of hardware in state agencies next year, 50 percent in 2021 and 20 percent in 2022, China Securities estimated, based on government requests and clients’ budgets.

The research, from September, detailed Beijing’s goals.

The Financial Times reported the number of computers to be replaced could reach 30 million.

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