The approach of swapping foreign software and hardware with indigenous equivalents isn’t really unprecedented for the Chinese, but it has undeniably been accelerated. The latest move towards this goal was made when China ordered government agencies to dump foreign computers and software to reduce dependency on imported technology.
Though eclipsed by the Ukraine war, the schism between the United States and China has persisted during the Biden Administration (since the White House has continued to transfer armaments to Taiwan in spite of Beijing’s insistence that no foreign groups intervene).
As a result, in the newest show of distrust, Beijing has instructed all government organizations and state-controlled organizations (i.e., the vast majority of Chinese businesses) to swap all foreign-branded PCs with Chinese-made goods. Furthermore, the new PCs should operate on operating systems put together domestically, according to the decree.
Bloomberg has further information:
Staff were asked after the week-long May break to turn in foreign PCs for local alternatives that run on operating software developed domestically, people familiar with the plan said. The exercise, which was mandated by central government authorities, is likely to eventually replace at least 50 million PCs on a central-government level alone, they said, asking to remain anonymous discussing a sensitive matter.
The decision advances China’s decade-long campaign to replace imported technology with local alternatives, a sweeping effort to reduce its dependence on geopolitical rivals such as the U.S. for everything from semiconductors to servers and phones. It’s likely to directly affect sales by HP Inc. and Dell Technologies Inc., the country’s biggest PC brands after local champion Lenovo Group Ltd.
The announcement boosted Chinese laptop and software stocks. Lenovo (currently owned by a Chinese corporation after being purchased from IBM years ago) rose as high as 5% in Hong Kong on Friday, whilst software maker Kingsoft rose 3.3 percent upon that announcement, wiping previous losses.
On the mainland Chinese exchanges, server producer Inspur rose 6%, whereas peer Dawning Information Industry rose more than 4%. Inspur Software, an Inspur group affiliate, and China National Software & Service both exceeded their daily 10% limitations.
This approach of swapping foreign software and hardware with indigenous equivalents isn’t really unprecedented for the Chinese, but it has accelerated since the Trump Administration hobbled Huawei with a slew of sanctions and the Commerce Department’s “blacklist.”
However, after 2021, the Chinese central government covertly authorized a government-backed entity to inspect and certify local suppliers, thereby barring foreign vendors from critical high-tech industries ranging from the cloud to semiconductors.
Conveniently for the Chinese, several of the world’s largest laptop and server manufacturers, such as Lenovo, Huawei, and Inspur, now incorporate homegrown enterprises, while domestic developers such as Kingsoft and Standard Software have made tremendous progress in office applications against the likes of Microsoft and Adobe.