Following the U.S. ban that prohibited domestic companies from supplying equipment to Huawei back in May, the technological Cold War between the U.S. and China just became a bit more intense now that Beijing has ordered all Chinese government and public-facing offices to replace any equipment featuring foreign components.
According to The Financial Times, China’s push to eliminate its reliance on foreign tech is part of a larger movement spurred on by previous policies like the Cyber Security Law that was passed back in 2017 and the Chinese government’s overarching Made in China 2025 directive.
However, after Huawei was blacklisted from buying tech made by U.S. companies, China is apparently stepping up its efforts to ditch tech sourced from outside its borders.
The Financial Times says that based on estimates from analysts at China Securities, this would mean the Chinese government would need to replace between 20 to 30 million pieces of hardware. Substitutions are slated to start next year under the '3-5-2' policy, which got its nickname due plan’s timeline of replacing 30 per cent of foreign gadgets in 2020, 50 per cent in 2021, and the final 20 per cent in 2022.
The companies that will probably be hardest hit by this plan are large computer and server makers like HP and Dell and major chip makers like Intel and AMD. On the flip side, Lenovo could see a huge uptick in sales, as it’s already one of the three largest PC makers in the world (along with HP and Dell), assuming it can find suitable Chinese-made replacements for the Intel and AMD processors Lenovo typically uses in its systems.
Microsoft could also take a beating because even though it created a special Chinese Government Edition of Windows 10 in 2017, it appears that’s not quite good enough now that China is aiming to replace Windows with a true homegrown operating system.
Either way, the technological divide between east and west continues to grow and, with Trump in office and both sides retaliating against each other, it’s hard to predict how far this Cold War can really go.
Featured photo: Getty