China is aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020, stepping up efforts to shift to Chinese suppliers, according to people familiar with the effort.
The push comes after a test of domestic alternatives in the northeastern city of Siping that was deemed a success, said the people, who asked not to be named because the details aren't public. Workers there replaced Microsoft Corp.'s (MSFT) Windows with a homegrown operating system called NeoKylin and swapped foreign servers for ones made by China's Inspur Group Ltd., they said.
The plan for changes in four segments of the economy is driven by national security concerns and marks an increasingly determined move away from foreign suppliers under President Xi Jinping, the people said. The campaign could have lasting consequences for U.S. companies including Cisco Systems Inc. (CSCO), International Business Machines Corp. (IBM), Intel Corp. (INTC) and Hewlett-Packard Co.
"The shift is real," said Charlie Dai, a Beijing-based analyst for Forrester Research Inc. "We have seen emerging cases of replacing foreign products at all layers from application, middleware down to the infrastructure software and hardware."
China is moving to bolster its technology sector after Edward Snowden revealed widespread spying by the U.S. National Security Agency and accused the intelligence service of hacking into the computers of Tsinghua University, one of the China's top research centers. In February, Xi called for faster development of the industry at the first meeting of his Internet security panel.
Foreign suppliers may be able to avoid replacement if they share their core technology or give China's security inspectors access to their products, the people said. The technology may then be seen as safe and controllable, they said.
| 