China to replace all foreign hardware and software at government and public institutions...

Humza

TechSpot Staff
Staff member

Among several developments in the US-China trade war has been the latter's push to make itself technologically independent of the US semiconductor industry. A major step in this direction is an order passed by the Chinese Communist Party, to push the government and public institutions to replace foreign-made computer equipment with local products.

Given its impact on US companies that have ongoing businesses with the Chinese government, such as Dell, HP, and Microsoft, the directive was meant to be implemented in secrecy, until details around its existence leaked to the Financial Times.

Although the policy documents remain confidential, employees from two cybersecurity firms, on the basis of anonymity, confirmed the new directive the FT after becoming aware of it through government clients.

According to the publication, the directive came directly from the Chinese Communist Party's Central Office earlier this year and will result in an estimated 20 to 30 million pieces of hardware that will need to be replaced over the course of three years.

China internally refers to the policy as "3-5-2" which is indicative of the pace at which replacements will be carried out. By the end of next year, 30 percent of foreign-made equipment in official use will be substituted with locally manufactured products from companies like Huawei and ZTE, among others. The plan will target another 50 percent of the equipment in 2021, and the remaining 20 percent will be replaced in 2022.

For now, this directive does not apply to privately-owned Chinese companies. It will also be challenging for government agencies to implement this change, considering that a majority of them use Lenovo PCs, which are powered by US-made hardware (Intel) and software (MS Windows).

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SirDigby

TS Evangelist
TechSpot Elite
"in an attempt to increase its reliance on domestic technology amid the current US sanctions"
There's a lot of bias in the way this sentence is phrased in the opening paragraph. Lets be fair, they're not trying to increase their reliance on domestic technology, they're trying to DECREASE their reliance on western technology.
Not being sympathetic to China or anything as their government are horrid, but lets try and be fair?
 

DasPooch

TS Rookie
This isn't anything new, and I doubt this particular development is due to any trade issues with us. For decades, China has made it the norm to: import foreign tech, reverse engineer it, start selling it domestically, then finally move away from the imports.
 

tkabou

TS Addict
Well, they transferred enough IP over the years to be self-sustainable on the tech front. At least "orange man bad" is fighting this and trying to do something about it...
 

gamerk2

TS Evangelist
Well, they transferred enough IP over the years to be self-sustainable on the tech front. At least "orange man bad" is fighting this and trying to do something about it...
Except he has *Zero* leverage to work with, and nothing to show for it. Hell, the trade deficit with China has *widened*, because, simply put, manufactures are willing to eat US import tariffs in order to have both lower labor costs and dodging retaliatory tariffs elsewhere.

Trumps idea was essentially he can cause enough pain to force China to come to the table, but the fact is there isn't anything he can do to cause that level of pain without tanking the economy (and his election chances) down with it.
 

psycros

TS Evangelist
Except he has *Zero* leverage to work with, and nothing to show for it. Hell, the trade deficit with China has *widened*, because, simply put, manufactures are willing to eat US import tariffs in order to have both lower labor costs and dodging retaliatory tariffs elsewhere.

Trumps idea was essentially he can cause enough pain to force China to come to the table, but the fact is there isn't anything he can do to cause that level of pain without tanking the economy (and his election chances) down with it.
He could always do exactly what China is doing and provide massive stimulus to rebuild the secondary component industry in the US. We used to make everything here, not just semiconductors and CPUs. Any politician who protested against what amounts to a job-creation program would be signing their own political death warrant - Trump could eviscerate them. The middle class has been driven almost to the point of extinction by out-of-control entitlements at the bottom and crony capitalism at the top. Perhaps its time to circle the wagons and return to something more akin the to the postwar economy, which was the best America had ever known. Heck, even building new fabs in Mexico would be a better solution than further enriching a belligerent, totalitarian superpower. Without a steady supply of new American tech to steal I think you'd see China get knocked down a peg.
 
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Uncle Al

TS Evangelist
It does make me wonder if this is just another verification of China creating weaknesses in exported products. That is to say, since they have been found out they are probably just as worried about those elements they are buying and are using, thus their best defense is to eliminate any of them in-country.
 

Markoni35

TS Maniac
It does make me wonder if this is just another verification of China creating weaknesses in exported products. That is to say, since they have been found out they are probably just as worried about those elements they are buying and are using, thus their best defense is to eliminate any of them in-country.
Well, Intel was known for creating weaknesses in their products. Not just for export. For domestic market too. For example, a flawed version of hardware hashing function, to make passwords breakable for the govt agencies. Not to mention deliberate security holes, which Intel chips have more than Swiss cheese.

Although, to be fair, Intel chips are designed in Israel. So it's more likely that Israeli Mossad has asked for those security holes without even notifying the US about them.
 
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gamerk2

TS Evangelist
He could always do exactly what China is doing and provide massive stimulus to rebuild the secondary component industry in the US. We used to make everything here, not just semiconductors and CPUs. Any politician who protested against what amounts to a job-creation program would be signing their own political death warrant - Trump could eviscerate them. The middle class has been driven almost to the point of extinction by out-of-control entitlements at the bottom and crony capitalism at the top. Perhaps its time to circle the wagons and return to something more akin the to the postwar economy, which was the best America had ever known. Heck, even building new fabs in Mexico would be a better solution than further enriching a belligerent, totalitarian superpower. Without a steady supply of new American tech to steal I think you'd see China get knocked down a peg.
The root problem is *always* going to be that the US has higher worker costs, so large scale manufacturing for goods that are primarily going to be sold overseas is simply not viable. Consumers made their choice decades ago: Lower costs *always* win over "buy American".

As for massive infrastructure programs, the problem is *always* going to be that you need to raise taxes to pay for it, which conservatives are simply unwilling to do. So it's always used pre-elections as a way for candidates to say "I'll fix things", but it has no hope of ever actually happening under the current political environment.

In my eyes, Clinton is the only President in living memory who managed the economy the right way, as he essentially reverted to the economic system used from the mid 30's to the early 70's: Federal spending to drive the economy, and taxes on the rich and business to pay for it. Standard Kynes economic theory, but one we'll never get again because you are *required* to raise taxes to pay for it. Regardless, Clinton managed high economic growth *without* significantly adding to the debt, which is something no other President since JFK was able to manage.

My long term outlook? 1% of the population owning 70%+ of the wealth isn't sustainable, and won't be for too much longer. There simply isn't enough money spread across the population to drive economic growth evenly, and that's why you see only high wealth areas growing at any significant rate. Things are going to come crashing down, and I suspect sooner rather then later. I think we're due for a '29 style economic collapse.
 
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gamerk2

TS Evangelist
Well, Intel was known for creating weaknesses in their products. Not just for export. For domestic market too. For example, a flawed version of hardware hashing function, to make passwords breakable for the govt agencies. Not to mention deliberate security holes, which Intel chips have more than Swiss cheese.

Although, to be fair, Intel chips are designed in Israel. So it's more likely that Israeli Mossad has asked for those security holes without even notifying the US about them.
I note Intels security holes are a result of taking shortcuts in the name of performance, and not intentional. Case in point: Itanium, which doesn't need those shortcuts, is immune to *all* these recently found security holes.