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According to a report by a major British IT company on May 6, the Chinese government instructed government agencies and state-owned enterprises to replace foreign-brand personal computers with domestic computers. It will also replace Windows with Linux. However, this directive excludes hard-to-replace components like Intel and AMD processors.

Government intervention has brought dramatic changes to China’s PC market. People gravitate towards local suppliers. This policy will result in the replacement of about 50 million PCs by the central government alone. Hewlett-Packard (HP) and Dell, the top two computer brands after domestic manufacturer Lenovo, will be disbanded. The Linux operating system will gradually replace Microsoft’s Windows.

China’s computer shipments increased by 10% to a record 57 million units in 2021. The top vendors are Lenovo with 41.8% market share, Dell with 12.5%, HP with 9.2%, Asus with 5.5%, and Acer with 5.2%.

In order to grow domestic technology companies, U.S. technology giants such as Microsoft and HPE have established joint ventures with companies that have ties to the CCP. In exchange these foreign companies are able to continually secure orders from state-owned enterprises. The new rules direct certain agencies to continue to purchase advanced foreign equipment under special licenses, but the rules will be tightened.

The CCP’s concerns about information security and the enhancement of domestic hardware products contributed to the policy. As a result, domestic computer and server makers, including Lenovo, Huawei, and Inspur will benefit. And developers such as Kingsoft and Standard Software will compete with Microsoft and Adobe for market share.

In the past few years, manufacturers such as Lenovo and Inspur have gained global market share despite relying on processors from Intel or AMD. In November 2021, the U.S. Department of Commerce added more than a dozen Chinese technology companies to its trade blacklist in an effort to prevent the Chinese military from gaining access to critical U.S. technology.

To protect America’s telecommunications infrastructure from potential security threats, the FCC prevents China Telecom from providing communications services within the United States. The FCC also bans the use of Huawei equipment in several regions, including the United States and the United Kingdom.

http://China plans to dump 50 million foreign PCs within the next two years

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