China reportedly removes foreign PCs from government agencies

Chinese authorities have reportedly ordered government agencies and state-owned enterprises to discard all personal computers made by foreign companies and replace them with local hardware within two years.

According to Bloomberg, “people familiar with the plan” recounted how government staff were told upon their return from China’s Labor Day holiday, which ran from April 30 to May 4, that they will have to throw away foreign computers.

The Bloomberg report claims that the mandate which has not yet been officially released could lead to the replacement of as many as 50 million PCs by the central government.

According to research firm IDC, the top PC maker in APAC last year was China-based Lenovo, with around 30% of the market. HP came in second with 14.3% market share, closely followed by Dell with 14.1% market share.

Chinese market-specific figures from Canalys, covering the second quarter of 2021, show that Lenovo has a 40% market share.

Coincidentally, Lenovo stock was up around 4% on Friday, following the release of Bloomberg’s report. The NASDAQ Composite over this period fell 1.4%.

The register asked HP and Dell for comment, but we did not hear back. We also asked Apple for comment, as a predictably uncommunicative communications service is always good for a laugh.

We contacted the Chinese Embassy in Washington, DC, which did not respond. The Commerce Department also did not immediately respond to a query. A spokesperson for the US State Department told us that the agency had nothing to say on the subject.

Sing an old tune

This is not the first time that such reports have circulated. In December 2019, the Financial Times published a similar article, “Beijing orders state offices to replace foreign computers and software.” At the time – amid the Trump administration’s friction with China and the banning of Huawei telecom equipment – ​​the transition was expected to take three years, which is about where we are now.

Then there was the time in 2014 when, according to Chinese news agency Xinhua, China banned Windows 8 on government computers. It was a month after Microsoft ended support for Windows 8 and Chinese officials grew concerned about the operating system’s security.

China has long wanted to wean itself off reliance on foreign technology suppliers. As early as 1999, government officials hoped that local Red Flag Linux would replace Windows. The software proved unpopular, however, and the project came to a halt in 2014.

More or less since Edward Snowden leaked classified information in 2013 about the reach of global surveillance programs run by the US National Security Agency, talk of unraveling global supply chains in the name of security national resumed. Under the Trump administration, trade disputes with China have escalated and sanctions against Chinese companies like Huawei have complicated global technology transitions like the adoption of 5G network technology.

Relations with China have not improved much under the Biden administration, which has enacted its own considerable set of trade restrictions, as China Briefing shows.

And thanks to Russia’s invasion of Ukraine and the subsequent sanctions imposed by the United States, EU countries and the United Kingdom, among others, Russia was also forced to impose locally made technology.

Even so, Scott Kennedy, senior adviser on Chinese business and economics at the Center for Strategic & International Studies, doesn’t seem to find the report particularly troubling.

“This is at least the fourth or fifth time that Beijing has ‘ordered’ foreign office equipment to be replaced, only to back down,” he said. by Twitter. “I don’t know why this time will be different. Even if they swap national brands, there will still be a lot of American and Western technology inside.” ®

Ashley C. Reynolds