Beijing has ordered all government offices and public institutions to remove foreign computer equipment and software within three years, in a potential blow to the likes of HP, Dell and Microsoft, reported the Financial Times.
The directive is the first publicly known instruction with specific targets given to Chinese buyers to switch to domestic technology vendors, and echoes efforts by the Trump administration to curb the use of Chinese technology in the US and its allies.
The move is part of a broader campaign to increase China’s reliance on home-made technologies, and is likely to fuel concerns of “decoupling,” with supply chains between the US and China being severed.
Analysts at China Securities, a broker, estimate that 20 million-30 million pieces of hardware will need to be swapped out as a result of the Chinese directive, with large scale replacement beginning next year. They added the substitutions would take place at a pace of 30% in 2020, 50% in 2021, and 20% the year after, earning the policy the nickname “3-5-2.”