Why China Is Weaning Itself Off American Technology

Why China Is Weaning Itself Off American Technology
AP Photo/Mark Schiefelbein

The Financial Times reported this weekthat China has ordered “all government offices and public institutions to remove foreign computer equipment and software within three years.” The move, part of China's broader push to reduce its reliance on U.S. technology, is a significant step toward the decoupling of the world's two largest economies.

The Communist Party directive was issued earlier this year. It is “the first publicly known instruction with specific targets given to Chinese buyers to switch to domestic technology vendors,” according to The Wall Street Journal, which also reported the news. The policy requires that domestic suppliers fulfill a growing share of government procurement contracts over the next three years. Thirty percent of those contracts must be signed by Chinese suppliers next year, followed by another 50 percent in 2021, with the final 20 percent coming in 2022. China Securities, a brokerage firm, estimated that 20 to 30 million pieces of hardware will need to be replaced.

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