China has ordered all PC hardware and operating systems imported from foreign countries to be replaced in the next three years. This decision has shaken countries and intensified the ongoing tech war. This is China’s most serious effort till date aimed to free itself from the influence of the western technology sector.

This order was passed from the higher officials of the Chinese government earlier this year. The goal is not just to replace European and American software and operating systems with Chinese equivalents, but the hardware used by them as well.

China has earlier ordered purges of western software, but they stayed limited due to security issues. Efforts were made five years ago to wean the country off Windows and Android, but finally, they proved abortive. This time is the situation is different. The U.S. – China tension has become strained, especially in the world of tech, where both countries have entered into a stronger rivalry. Post the U.S. banned some large Chinese hardware providers, including ZTE and Huawei, the rift has been widened.

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As a reaction to this decision, China has come up with a stronger resolution asking all government offices and public institutions to remove or replace all foreign computer equipment. This sudden directive has deeply impacted western technology brands like Dell, HP, and Microsoft. The series of bans imposed by both the countries mirrors that the trade war will soon turn into a tech cold war.

Replacing all the imported devices and software in the given timeframe of three years will be challenging. The challenge will be intensified as most products were developed for US operating systems such as Windows. The Chinese government offices are looking forward to using desktop computers from the Chinese-owned company Lenovo. But, the major challenge is regarding the components of the machines, including processor chips and hard drives, which are made by American companies.

The FT reported that the directive would result in the replacement of an estimated 20m to 30m pieces of hardware. The apparently decisive nature of this order should come as no surprise post the Huawei incident. The goal is to replace 30% of the software and computers by the end of 2020, an additional 50% in 2021, and the remaining 20% by 2022.

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The Trump administration has cleared that the real battle is about which of the two economic superpowers has the technological edge for the decades. Banning Huawei this year with Google, Intel, and Qualcomm freezing cooperation with it, re-assured his intentions or excluding China from the western knowhow.

Though, the three-year “3-5-2” plan seems ambitious. Tens of millions of devices will require replacement, but it isn’t as simple as trading out HP machines for the Chinese-manufactured ones. The components and software need to be Chinese as well, so AMD and Intel processors are out, as are Nvidia ARM, GPUs, architectures, Sony image processors, and so on.

Hopefully, this entire change won’t come as a shock, as many Chinese companies have been preparing for this eventuality for years. China has cleared its desire to establish independence from U.S. tech companies and many state-backed enterprises long back. The biggest concern of the officials, however, remains that the ban should not constrain other significant digital transformation efforts of the country.

This decision is likely to be a significant driver of industry dynamics for decades as developers, manufacturers, and suppliers all struggle to navigate the divergent markets.

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