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2024
China bans local companies from purchasing any Nvidia AI processors
At the end of September 2024, it became known that the Chinese authorities are increasing pressure on local companies, requiring them to purchase locally produced AI processors instead of Nvidia products. This decision is part of a set of measures by China to expand its semiconductor industry and counter US sanctions. Read more here.
China has released a national OS with support for domestic processors
On July 23, 2024, it became known that China had released a national operating system with support for domestic processors. Tencent Cloud has introduced a new version of the fork of the CentOS Linux distribution - TencentOS Server V3, which supports a number of processors developed in China, such as Kunpeng, Hygon and Feiteng. The system is intended exclusively for users in the PRC and is aimed at cloud use cases. Read more here
Beijing began to return some of the money to companies when buying computers with Chinese chips
At the end of April 2024, it became known that the authorities Beijing developed a scheme to subsidize local companies and organizations that purchase computers with Chinese chips. This initiative is designed to reduce dependence on foreign manufacturers of processors and accelerators, which is important in the context of sanctions from the outside. USA
New support measures were introduced by the Beijing Municipal Bureau of Economics and Information Technology. The amount of subsidies provided to Chinese companies has not been disclosed, but it says it will be proportional to the investment needed to deploy computer infrastructures. The money, in particular, will be provided to enterprises that purchase accelerators based on Chinese-designed GPUs (GPUs). Such solutions are needed primarily to keep artificial intelligence-based applications running.
 | By 2027, Beijing will achieve self-sufficiency in terms of developing an intelligent computing infrastructure - with overall performance at the level of the world's leading platforms, the document says. |  |
The South China Morning Post reports that China is trying by all means to increase computing resources in the face of technological restrictions from the United States. US trade sanctions prevent Nvidia from exporting its advanced graphics accelerators to China, such as the A100 and H100, which are used to train AI models. Reuters notes that universities and research organizations in mainland China are acquiring Nvidia's high-performance AI accelerators through resellers, despite Washington's current restrictions. At the same time, Beijing is implementing various initiatives to strengthen its own computing power.[1]
Chinese schools massively replace Windows computers with Intel processors with domestic Linux devices
In early April 2024, it became known that Chinese schools are massively abandoning the use of computers with foreign processors and the Windows operating system. Instead, domestic chips and OS on the Linux kernel are used.
According to Tom's Hardware, the authorities of Hebi City District in Henan Province purchased 10,000 personal computers equipped with a Loongson 3A5000 processor. This chip with four computing cores is based on the LoongArch GS464V architecture. The clock speed is 2.30-2.50 GHz. The product includes two DDR4-3200 RAM controllers.
As a software platform on a PC, it is used UOS (Unity Operating System) on the Linux kernel, developed by the company UnionTech by order of the PRC in order to replace foreign products. The system is based on Deepin, the Chinese Linux distribution, which in turn is based on. Debian In addition, WPS Office a set of office applications created by the Chinese company Kingsoft Corporation as an alternative is installed on computers. The Microsoft Office pre-installed set software includes more than 100 other applications and utilities aimed at both students and teachers.
The purchased computers were sent to 50 schools in Haby City District. As part of the project, Loongson, in addition to supplying processors, participated in the development of a number of training materials. Loongson also supplied training robots to schools and created learning scenarios. The transition to alternative IT solutions is associated with tough sanctions from the United States, due to which China lost access to advanced foreign technologies. Going forward, systems on the Loongson platform are expected to be delivered to schools in other Chinese regions.[2]
Chinese officials banned from purchasing PCs with Intel and AMD processors
At the end of March 2024, it became known that China introduced new guidelines in response to sanctions from the United States. The use of Intel and AMD processors in computer systems for government organizations is prohibited.
The PRC State Asset Oversight and Management Commission recommends that state-owned enterprises complete the transfer of their IT systems to Chinese platforms by 2027. This is not only about hardware, but also about software products. This affects Windows operating systems and other software manufactured by Microsoft, as well as other Western companies.
The new procurement rules, as noted, represent "China's most significant step in creating domestic alternatives to foreign technology." These measures apply not only to the segment of personal computers, but also to server systems. From 2023, government agencies report quarterly on the implementation of Chinese solutions in their IT infrastructures.
Meanwhile, as noted, Chinese retaliatory measures against the United States could deal a serious blow to the business of American companies. In 2023, China was Intel's largest market, providing 27% of the company's $54 billion in sales. In the case of AMD, the PRC market accounted for 15% of $23 billion in sales. Microsoft, as of March 2024, does not disclose sales data in China.
According to analysts at Zheshang Securities, China will need to invest 660 billion yuan ($91.56 billion at the exchange rate as of March 25, 2024) from 2023 to 2027 to import substitution of IT infrastructure in the government, party bodies and major industries. Amid US sanctions, Chinese companies are activating efforts to develop their own chips on the open RISC-V architecture.[3]
Order for state-owned companies to abandon American software
On March 7, 2024, it became known that the Chinese government had issued a secret directive instructing state-owned companies to completely abandon American software and replace it with products created in the PRC. The so-called "Document 79" was prepared by the Commission for Supervision of State Assets and Their Management and the State Council of the PRC.
According to The Wall Street Journal, the directive is so secret that senior officials and company executives are allowed only to familiarize themselves with it, while copies are prohibited. According to the document, state-owned companies in the financial, energy and other sectors are obliged to stop using foreign software by 2027. At the same time, organizations must provide quarterly reports on the progress of work on import substitution of American software.
"Document 79" is part of a larger initiative by the Chinese authorities, which aims to reduce dependence on foreign suppliers both for reasons of cost savings and in connection with the strengthening of national security. The program is being implemented against the backdrop of deteriorating relations between Beijing and Washington in the fields of trade and technology. The US authorities have imposed tough sanctions on China, while the PRC government has taken measures to restrict the use of American equipment, including servers and network products from companies such as Dell, IBM and Cisco.
The Document 79 directive could hit a number of U.S. corporations hard, including Microsoft and Oracle, which make significant profits from doing business in China. In addition, the Chinese government plans to increase investments in the development of science and technology: in 2024, about $51 billion will be allocated for these purposes, which is 10% more than in the previous year.[4]
2023: How China undergoes IT import substitution
In 2022, the Chinese authorities expanded funding for a large-scale import substitution program for high-tech products. The transition to the solutions of local developers is especially important in the context of tougher sanctions by the United States. This is stated in a Reuters study, the results of which were published on October 26, 2023.
According to data released by the Ministry of Finance, from PEOPLE'S REPUBLIC OF CHINA September 2022 to September 2023, the number of tenders from state-owned enterprises governmental and military organizations for the nationalization of equipment reached 235, which is twice as much as the previous period (119 tenders). The cost of projects during the period under review increased approximately three times, amounting to 156.9 million yuan (about $21.44 million at the exchange rate as of October 27, 2023). Moreover, it is noted that the database of the Ministry of Finance does not collect information about all tenders held China within the framework of the import substitution program.
According to estimates by the research company First New Voice, in 2022, about 1.4 trillion yuan ($191.31 billion) was spent in China to replace imported software and computer equipment. This is 16.2% more compared to 2021.
In 2022, the Chinese authorities obliged state organizations to completely replace foreign office software with domestic solutions by 2027. According to IDC estimates, against this background, the combined share of the five largest foreign manufacturers of database management systems (most of which are American) fell in China from 57.3% in 2018 to 27.3% by the end of 2022. At the same time, Beijing's lack of advanced chip manufacturing capabilities does not allow China to completely abandon the products of foreign suppliers. Nevertheless, in December 2022, some units of the People's Liberation Army of China announced tenders to replace foreign-made computers.[5]
2022: PRC government replaces foreign computers with Chinese ones in government agencies and state-owned companies
In early May 2022, China ordered government agencies and state corporations to replace personal computers of foreign brands with domestic alternatives. The government directive will only apply to PC brands and software, but will not include hard-to-replace components, including microprocessors.
Bloomberg After a week-long May holiday in 2022, employees were reportedly asked to hand over foreign PCs and replace them with local alternatives running on domestically developed operating software, it said. This Chinese measure, prescribed by the central government, will ultimately replace at least 50 million PCs at the central government level alone.
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The PC replacement project also reflects growing concerns Beijing about, information security states as well as confidence in, domestic hardware, with the world's largest manufacturers laptops and servers for May 2022 at,, and China Lenovo Huawei Inspur. Local developers, such as Kingsoft Standard Software, have made rapid progress in the field of office () software ON in the fight against and, according to Microsoft Adobe Bloomberg.
According to Bloomberg, some departments, including state media and cybersecurity authorities, may continue to buy advanced foreign equipment under special permits, as was the case until May 2022, but this permit system may be tightened after 2024.[6]
2019: China begins to completely abandon foreign computers and software
On December 9, 2019, China announced a plan to completely abandon foreign computers and software. The authorities want to implement 100% import substitution by 2022.
According to The Guardian newspaper, a total of 20-30 million samples of equipment used by state institutions of the PRC are planned to be replaced. 30% of this amount should be replaced by Chinese equipment in 2020, 50% in 2021 and 20% in 2022.
Experts believe that it will be difficult to achieve a complete abandonment of imported computers and components: for example, chips and, hard drives used laptops in Chinese, Lenovo are released by American suppliers. Also by December 2019, it is unclear which alternative Windows is going to be used in the Celestial Empire. Perhaps they will resort to Linux the Deepin attribute, the development of which was originally carried out by Chinese specialists.
The policy of the Chinese authorities assumes that all state institutions and key infrastructure operators should use "safe and controlled" technologies, which is enshrined in the law on cybersecurity adopted in the PRC in 2017. The program "3-5-2" is a component of this policy.
| | The goal of the program is clear, to provide an environment free from the threats that ZTE, Huawei, Megii and Sugon currently face, "said Paul Triolo, an analyst at Eurasia Group consulting company. | |
The order of the Communist Party China on the complete replacement of computer equipment software and foreign production with Chinese analogues in state institutions was a response to actions USA that introduced a ban on the purchase of Chinese equipment by American state institutions.
In addition, this step is part of the program of the Chinese authorities to ensure the country's technological independence from foreign software developers and computer manufacturers.[7]
Notes
- ↑ Beijing to push subsidies for local firms to buy China-made chips to shore up city’s computing infrastructure
- ↑ Chinese chipmaker gains traction replacing American processors - Longsoon ships 10,000 chips into schools
- ↑ China blocks use of Intel and AMD chips in government computers
- ↑ China Intensifies Push to ‘Delete America’ From Its Technology
- ↑ China rushes to swap Western tech with domestic options as U.S. cracks down
- ↑ China Orders Government, State Firms to Dump Foreign PCs
- ↑ Beijing orders removal of foreign computers and software
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