The Chinese government has ordered the state agencies to remove foreign technology from state agencies and other organizations, a clear sign of determination for more independence amid escalating trade related tensions with the U.S.
Beijing will 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 the Communist Party’s Central Office earlier this year ordered state offices and public institutions to shift away from foreign hardware and software.
In 2020, key industries such as finance, energy, and telecoms will test more domestic products in trials that may last years. Chinese banks are supposed to shift from International Business Machines Corp. and Oracle Corp. to more diversified X86 architecture suppliers and then eventually to fully made-in-China hardware.
“The China-U.S. trade war could also help to breed a new market for home-made products,” China Securities analyst Shi Zerui wrote.
However, Beijing’s aggressive tactics have proven difficult because its domestic industry hasn’t yet shown itself capable of matching foreign technologies in certain sectors.
Particularly hard to replace, are semiconductors from suppliers like Intel Corporation and Nvidia Corporation, as well as software from Microsoft Corporation and Apple Inc.