China aims to replace up to 30 million pieces of foreign tech in government offices with Chinese tech by 2022

• The Chinese government has instructed its offices to phase out foreign tech, including hardware and software, by 2022, according to the Financial Times.
• The move is to reduce China’s reliance on foreign-made tech, and it could affect companies like Dell, HP, and Microsoft.
• The new directive is an accelerated push on China’s 2017 Cyber Security Law, which was already designed to reduce China’s reliance on foreign-made tech.
• It’s not clear if the escalation is in retaliation to the Trump administration’s US blockade on Huawei technology in US government offices earlier this year.
• Many of the parts in some Chinese computers come from American or Korean companies; it may be difficult to fully replace foreign-made computers and parts with Chinese-made computers and parts by the 2022 deadline.
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The Chinese government has instructed its offices to phase out technology made outside of China, including hardware and software, by 2022, according to the Financial Times.

The move is partly designed to have China rely less on foreign-made technology, according to the report. The directive could mean that US companies like Dell, HP, and Microsoft could suffer a blow in China.

It’s not clear if the move is a retaliation against the Trump administration’s US blockade on Huawei technology in US government offices earlier this year. China was already engaged in reducing its reliance on foreign companies with its 2017 Cyber Security Law, but the US’s sanctions against Huawei may have accelerated the project, according to Eurasia Group consultant Paul Triolo who spoke with the Financial Times.

More recently, Huawei was banned from accessing Google’s Play app store for Android devices, which effectively removed Huawei’s smartphones from the global competitive landscape. Before the ban, Huawei was touted as the second-largest smartphone maker in the world.

It’s estimated that between 20 million to 30 million computers and other tech hardware will be replaced, according to China Securities analysts. Thirty percent of hardware is expected to be replaced by 2020 and 50% by 2021, with the remaining 20% of technology replaced by 2022.

While it’s possible to replace foreign-made computers with Chinese-made computers – like replacing a US-based Dell with a China-based Lenovo – it’s unclear how comprehensive the Chinese government plans to be with its directive.

Lenovo computers are, indeed, Chinese, but the majority of the most critical components that run Lenovo computers are foreign-made. For example, they run on processors from the American company Intel, and they use memory from Samsung, a Korean company.

China has its own processor companies, like Semiconductor Manufacturing International Corporation (SMIC), but analysts say SMIC is several years behind international competitors.

There’s also the question of software, as most software is designed to run on operating systems like Windows, made by American company Microsoft. If Microsoft’s Windows is to be replaced, software developers will have to develop apps to run on an operating system developed by China, like Kylin OS.