The Government Procurement Document 📄🏛️
A document released by China’s Ministry of Finance and the Ministry of Industry and Information Technology. It outlines the government procurement standards for desktop computers, with the 2023 version published on the Ministry of Finance’s official website on December 26th, 2022. 📅
At first glance, the document appears unremarkable, simply listing parameters and standards for government agencies to purchase computers. However, as the saying goes, “The most important things are often unseen.” 🕵️♀️
The Financial Times Revelation 📰🗞️
On March 24th, the Financial Times published a report unveiling the crucial content hidden within this document: China is banning the use of US chips, including Intel and AMD computer CPUs, and strongly recommending against the use of Microsoft’s Windows operating system. 🚫🇺🇸
The document also provides options for domestic alternatives, signaling China’s acceleration in removing US tech products from its market. 🚀🇨🇳
Phasing Out US Tech 👋🇺🇸
The Financial Times emphasized that the Chinese government has issued guidelines to gradually phase out the use of Intel, AMD, and other US microprocessors in government PCs, servers, and other computing devices previously relying on American technology. 🔁
This procurement standard implies that government PCs and servers will gradually stop using CPUs produced by these American companies. 💻🛑
Reducing Reliance on Foreign Software 🔍📂
China’s action extends beyond hardware and CPUs. The government is also seeking to reduce its reliance on widely-used software like Microsoft’s Windows operating system and foreign-made database systems dominated by US companies. 🌎💻
Targeted Restrictions 🎯🏛️
According to the Ministry of Finance’s website, the procurement requirements apply to party and government agencies at the town level and above, along with directly affiliated institutions and supporting units. In other words, the ban primarily targets government departments, party organizations, state-owned enterprises, and related institutions. 🏢🏭
The goal is to prioritize domestic products, replacing Microsoft Windows, foreign-made database software, and crucially, CPUs from non-Chinese companies. 🇨🇳💻
The Significance of Security and Reliability 🔒✅
Separate lists of processors, operating systems, and databases deemed “secure and reliable” for three years from the publication date were included in the guidelines. 📋
Coincidentally, China’s National Information Security Testing and Evaluation Center also released a list of “secure and reliable” processors and operating systems on the same day. 📃
Upon cross-referencing these documents, a crucial conclusion emerges: all the software, hardware, processors, and database products deemed “secure and reliable” originate from Chinese companies. 🇨🇳💻🔐
China’s Retaliation Against US Tech Restrictions 🛡️⚔️
This move is arguably expected, given the US’s continuous tech restrictions and “small yard, high fence” strategy against China, aiming to weaken its chip and tech supply chains. 🇺🇸📉
The US has imposed various sanctions on Chinese companies under the pretext of national security, while also encouraging domestic production and blocking exports of advanced chips and technologies to China. 🚫🇨🇳
The Huawei Saga 📵💔
Huawei’s 5G products have been banned from sale in the US and its allied countries, while its smartphones and other electronic devices are prohibited from entering the US market – a prime example of the US’s “small yard, high fence” strategy against Chinese tech. 🇺🇸🚫🇨🇳
China’s Tech Localization Strategy 🌐🇨🇳
China’s latest move demonstrates its unwillingness to tolerate further US tech restrictions. Instead of waiting for the US to decide which products can be sold to China, Beijing has proactively banned the use of American tech products within government agencies, state-owned enterprises, and affiliated institutions. 🚫🇺🇸
This step marks China’s resolute advancement of its tech localization strategy and a counterattack against US attempts to “strangle” Chinese tech. 🇨🇳⚔️
The Inevitable Decline of US Tech in China 📉🇺🇸
While the ultimate effects remain to be seen, the impact on the market share and presence of US tech products in China is predictable. As government units, state-owned enterprises, and affiliated institutions phase out these products, a ripple effect is likely to spread throughout the Chinese market, accelerating the adoption of domestic alternatives. 🌊🇨🇳
Major US tech companies will likely lobby the US government intensely as their influence in China wanes, exemplified by Dell’s 44% sales plunge in the Chinese market, with Huawei overtaking and surpassing it. 📉💼
Huawei’s Rise and Dell’s Decline 🌟📉
Thanks to its remarkable innovations and brand-building efforts, Huawei has gradually become a market leader in China, while Dell’s sales have plummeted, making it increasingly irrelevant in the Chinese market. 🇨🇳💻
Market Data Speaks Volumes 📊🗣️
According to the latest market research report, China’s PC shipments in 2023 reached 41.2 million units, a 17% year-over-year decline. 📉
Lenovo shipped 15.536 million units (38% market share) but saw a 19% drop. HP shipped 4.3 million units, down 2%, while Dell shipped only 3.148 million units, plunging a staggering 44%. 📉🇺🇸
In contrast, Huawei achieved an 11% year-over-year growth, shipping 3.986 million units, showcasing its resilience and appeal to Chinese consumers amid a declining overall market. 🚀🇨🇳
This data vividly illustrates the real-world impact of the ongoing tech “decoupling” between the US and China, with American brands struggling as Chinese companies like Huawei gain momentum. 📈🇨🇳📉🇺🇸
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