The new policy introduced by the Chinese government has been compared to the Trump administration's attempts to reduce the use of Chinese technology in the US.
Neil Campling, head of technology, media and telecommunications research at Mirabaud Securities, said the move by the Chinese government aims to protect against an escalation of tensions with the U.S. The plan will target another 50 percent of the equipment in 2021, and the remaining 20 percent will be replaced in 2022.
Either way, the technological divide between east and west continues to grow, and with Trump in office and both sides retaliating against each other, it's hard to predict how far all this Cold War can really go. The trade war only accelerated this trend, with the US government banning Huawei and other Chinese companies from selling technology to USA federal agencies.
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While this is the first official directive (that we know about) specifically limiting China's use of foreign technology, it is part of the country's ongoing efforts to increase takeup of domestic technology.
The Financial Times noted the ban on foreign tech products is part of a move on the part of Beijing to rely more on technology made in the country rather than from foreigners.
The order came from the headquarters of the Chinese Communist Party earlier this year, analysts said. Recent reports suggest that Beijing has responded in kind, banning US-made equipment from government offices. China's technology firms have been the target of USA pressure.
"Cutting off technical services to Huawei will be a real turning point in China's overall research and development and use of domestic chips", he said in a social media post. As there are many products developed for United States operating systems like Windows for Microsoft.
US firms have tried various ways to participate in government tenders as China ramps up purchases of domestic goods, including forming joint ventures and tailoring it's products to Chinese authorities' requirements.