Taiwanese online news site Storm recently reported that China’s central government established a three-year plan to replace all foreign hardware and software in the entire government system. Although the Chinese government did not confirm the existence of such a plan, the news was verified via multiple channels. It is relatively easy for the Chinese government to switch entirely to Chinese vendors like Lenovo, which is a preferred supplier today anyway. However, nearly all software in use today in the government system was designed to run on either Microsoft Windows or Apple MacOS. It is expected to be very challenging to replace U.S. made operating systems and the day-to-day software packages that run on top of them. Chinese domestic operating systems attempted this in the past decade or two and failed multiple times. There are hardly any software developers who are willing to develop for the domestic operating systems. Analysts expressed the belief that the new policy will have a major impact on the Chinese IT industry. However, the private sector may not go along with the government to replace IT environments. Even in the hardware space, with strong domestic vendors’ support, it is very hard to overcome the fact that critical components like CPU and memory are almost all made outside of China.
Source: Storm, December 9, 2019