China has ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives within two years, marking one of Beijing’s most aggressive efforts to eradicate key overseas technology from within sensitive institutions, says an article published in TaipeiTimes.
Local alternatives
Staff were asked after the week-long International Workers’ Daybreak, from last Saturday to Wednesday, to turn in foreign PCs for local alternatives that use operating software developed domestically, people familiar with the plan said.
The exercise, which was mandated by central government authorities, is eventually to replace about 50 million computers within the government, and more in state-connected firms, the sources said.
Reducing dependence on geopolitical rivals
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 US for everything from semiconductors to servers and phones. It is likely to affect sales by HP Inc and Dell Technologies Inc, the country’s largest PC brands after local champion Lenovo Group Ltd.
Lenovo shares erased losses to climb as much as 5 percent yesterday in Hong Kong, while software developer Kingsoft Corp also recouped its earlier decline to gain 3.3 percent.
On mainland Chinese exchanges, Inspur Electronic Information Industry Co , a servermaker, gained 6 percent, while peer Dawning Information Industry Co jumped more than 4 percent. Inspur Software Co and China National Software & Service Co soared to their daily 10 percent limits.
Wean off reliance on US technology
The push to replace foreign suppliers is part of a longstanding effort to wean China off its reliance on US technology, a vulnerability that was exposed after US sanctions against companies such as Huawei Technologies Co hammered local firms and businesses.
That initiative has accelerated since last year, when the Chinese central government quietly empowered a secretive organization to vet and approve local suppliers in sensitive areas from cloud computing to semiconductors.
The PC replacement project also reflects Beijing’s growing concerns about information security, as well as its confidence in homegrown hardware. The world’s biggest laptop and servermakers today include Lenovo, Huawei and Inspur Ltd, while local developers such as Kingsoft and Standard Software have made rapid strides in office software against the likes of Microsoft Corp and Adobe Inc.
Setting up its chipmaking unit
The campaign is to be extended to provincial governments later and also abide by the two-year timeframe, the sources said.
Lenovo is likely to gain the most from Beijing’s move. The nation’s No. 1 PC maker relies on US chips, but has set up its own chipmaking unit and has invested in at least 15 semiconductor design firms.
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Source: Taipei Times
