China asks government, SOEs to replace foreign-branded PCs with domestic products
The Lenovo IdeaCentre AIO 3.

Asian Tech Press (May 6) -- China has asked government agencies and state-owned enterprises (SOEs) to replace foreign-branded personal computers (PCs) with domestic products.

Central government agencies, SOEs, government-related enterprises and institutions have been asked to replace the foreign PCs they currently use, with home-made alternatives, sources close to the matter said, marking one of Beijing's strongest measures to exclude key overseas technologies from its most sensitive organs.

Sources close to the matter said that the campaign will also be expanded to provincial governments later.

The number of PCs to be replaced at the central government level is at least 50 million units, and the replacement effort is expected to end within two years.

Analysts said the move reflects Beijing's growing concerns about information security, while also showing confidence in domestic hardware and software.

A number of Chinese companies have become major players in the global PC and server market, including Lenovo, Huawei and Inspur Ltd., and local software developers such as Kingsoft and China Standard Software Co. have emerged rapidly to compete with the likes of Microsoft and Adobe.

China has been encouraging government agencies to use home-made IT products for years, and often excludes certain foreign products from government procurement lists.

In response, U.S. giants such as HP Inc. and Microsoft have formed joint ventures with companies backed by Chinese government, to secure more lucrative orders from state-owned enterprises.

But these efforts have been plagued by the shortcomings of Chinese-developed software and hardware. Local giants such as Inspur Ltd. and Lenovo have expanded their share of the global market in recent years, but their products still rely on U.S. components that use cutting-edge technology, such as processors from Intel or AMD.

The latest requirements from the central government are likely to cover only PC brands and software, excluding hard-to-replace components such as processors, people familiar with the matter said.

China will mainly encourage the replacement of Microsoft's Windows with Linux-based operating systems. One person familiar with the matter said China Standard Software Co. is one of the main suppliers of such tools.

Some agencies, including state-owned media and cybersecurity bodies, may continue to purchase advanced foreign equipment with special permission, one of the people familiar with the matter said.

Such permit system may also be tightened in the future, another person familiar with the matter said.

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