China's New Guidelines On US Technology

China has implemented strict new guidelines to phase out US microprocessors from Intel and AMD in government PCs and servers, as well as Microsoft’s Windows operating system and foreign-made database software. This move is part of China’s increasing efforts to replace foreign technology with domestic solutions, echoing similar actions taken by the US. The guidelines, unveiled on December 26 by the finance ministry and Ministry of Industry and Information Technology (MIIT), require government agencies to prioritize 'safe and reliable' processors and operating systems from domestic providers. China has also published a list of approved processors and operating systems, all from Chinese companies. This procurement revamp is in line with China’s strategy for technological self-sufficiency across military, government, and state sectors. The move signifies China’s determination to reduce dependency on foreign technology amidst escalating tensions with the US. The shift away from foreign hardware will have significant implications for US companies such as Intel and AMD. China, which accounted for a substantial portion of Intel and AMD’s sales, is now favoring domestic alternatives. This transition poses potential challenges for US tech companies to gain approval for their products under the new guidelines. Analysts expect a substantial investment from China to replace IT infrastructure in various sectors. Despite the impact on foreign companies, some flexibility in purchasing foreign technology remains in China, with limited continued procurement of Intel- and AMD-powered computers if compliant with relevant management procedures. This move by China underlines the growing competition and technological rivalry between the US and China, as both nations seek to enhance their domestic technology capabilities and reduce reliance on foreign suppliers.