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Porcelain has taken the first official steps to completely break away from American software and hardware on its computers by promoting local alternatives.
According to the Financial Times (FT), the new guidelines would “phase out” US microprocessors from “Intel and AMD” from government computers and servers and replace them with “homegrown solutions.”
The new policy also goes so far as to “sideline” Microsoft’s Windows operating system and foreign-made database software in favor of domestic substitutes. On a broader level, this represents the comprehensive nature of the new Great Power Contest between the United States and China, where both countries also compete in the political, economic, technological and military spheres.
The latest efforts to replace standard American computer software and hardware are part of a massive “tech war,” during which then-President Donald Trump’s administration restricted exports of microchips, semiconductor forging equipment and other technologies to Beijing. .
Since then, the People’s Republic of China has launched a massive indigenization campaign to forge its own semiconductors, led by the state-owned Semiconductor Manufacturing International Corporation (SMIC) and other private technology companies.
As many western media reports As he said, US sanctions ended up accelerating China’s chip self-sufficiency. The Communist Party of China (CPC) has invested tens of billions in state subsidies and research and development to bring is closer to forging its own chips under 7nm nodes.
The “semiconductor war” also has an important geopolitical impact. overlap. The world’s largest semiconductor foundry, Taiwan Semiconductor Manufacturing Corporation (TSMC), which has been restricted from selling chips to China, would be destroyed if Beijing decides to take the island by force and disrupt global supplies.
This is a great geoeconomic-technological advance. calculation That shapes China’s policy toward Taiwan, which still leans heavily toward “peaceful reunification.”
‘Replace US chips and software in government computers’
According According to the FT, the new measures were introduced by the Ministry of Finance and the Ministry of Industry and Information Technology with “little fanfare” on December 26 last year. Chinese officials gradually began “following” the new “PC, laptop and server” rules this year in what appears to be a low-key effort.
The latest measures came after Washington imposed “sanctions on a growing number of Chinese companies on national security grounds, legislated to encourage the production of more technology in the United States, and blocked exports of advanced chips and related tools to China.”
Chinese authorities have now ordered “government agencies and party bodies above the municipal level” to include criteria requiring “secure and reliable” processors and operating systems when making purchases.
In December 2023, the China Information Technology Security Assessment Center published its first list of “safe and reliable” processors and operating systems from Chinese companies.
Among the 18 approved processors were chips from Huawei and the state group Phytium. Both are on Washington’s export blacklist. “Chinese processor makers are using a mix of chip architectures, including x86 from Intel, Arm and local ones, while operating systems are derived from open source Linux software,” the report added.
Beijing’s renewed procurement is part of a national strategy for technological “autarky” in the military, government and state sectors that is known as XinChuang or “IT application innovation.” A local government IT official quoted by the FT said the standards “are the first clear, detailed, nationwide instructions for the promotion of Xin Chuang.”
Similarly, the State-Owned Assets Supervision and Administration Commission ordered state-owned enterprises to complete a technological transition to domestic suppliers by 2027. Since last year, state-owned groups have begun reporting quarterly on their progress in modernization. of its IT systems, “although some foreign technology companies would be allowed to stay.”
US companies fear trade war
The state-led shift away from foreign hardware will affect American companies in China, starting with the world’s leading PC processor makers, Intel and AMD. Last year, China was Intel’s largest market, providing 27 percent of its $54 billion in sales and 15 percent of AMD’s $23 billion in sales.
Microsoft did not break out sales in China, but President Brad Smith told the US Congress last year that the country contributed 1.5 percent of its revenue. Microsoft and Intel declined to comment.
Previous reports have noted how American technology and computer hardware companies have been reluctant to geopolitical rivalry with China, citing commercial interests. In July last year, the Semiconductor Industry Association (SIA) said that new measures by the Biden administration “could be counterproductive,” according to a report in the South China Morning Post (SCMP).
“Allowing the industry to have continued access to the Chinese market, the world’s largest commercial market for commodity semiconductors, is important to avoid undermining the positive impact (of the Chips and Science Act),” SIA said in a statement.
In October 2023The New York Times (NYT) reported that American chip companies “have responded with a blunt warning,” saying that cutting sales to China “would gut their businesses and derail the administration’s plan to build new semiconductor factories in the United States.” ”.
“Since July, Nvidia, Intel and Qualcomm, three of the world’s largest chipmakers, have defended their argument that cracking down on China would have unintended consequences.
They have challenged the White House’s national security wisdom in meetings with officials such as Secretary of State Antony J. Blinken and Commerce Secretary Gina M. Raimondo, courted think tanks and urged leaders across Washington to reconsider additional chip controls, according to interviews with two dozen officials from across government, industry and political organizations,” the NYT said.
