China prohibits the use of Intel and AMD processors, as well as Microsoft Windows, on government computers.

An in-depth exploration of China's recent directive banning Intel, AMD processors and Microsoft Windows from government computers and the possible future implications

Chinese government officials have reportedly enforced a ban on foreign technology. The ban includes the use of processors from international giants such as Intel and AMD, as well as other software like Microsoft Windows in government computers. This decision, it seems, marks a significant step in China's quest for technological independence from global superpowers.

With the stage set for an ambitious technological transformation, China has trailblazed a new path. The government seeks to replace foreign-made hardware and software with homemade alternatives within three years. A Beijing-based consultancy firm, China Securities, was the first to reveal this strategic move.

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China's drive towards technological independence has been a significant part of state policy for years. Yet the ban on foreign processors and computer operating systems is a clear indication of the extent the government is willing to go. On the receiving end of this directive are big names like Intel, AMD, and Microsoft.

China prohibits the use of Intel and AMD processors, as well as Microsoft Windows, on government computers. ImageAlt

Also revealed was that eight million computers would be affected by the ban. This accounts for about 30% of all computers in the Chinese government. There is no doubt that the move is likely to significantly affect the aforementioned tech corporations once the ban is fully implemented.

China's Strive for Independence

The ban on foreign hardware and software sits well with China's goals; the chief among them being technological independence from the rest of the world. This move also fits with Beijing's aim to strengthen its local tech companies and make them competitive on a global scale.

The government's plan to replace foreign tech in its computers is often referred to as the “3-5-2 policy”. Under this strategy, 30% of substitutions are to occur in 2020, 50% in 2021, and the final 20% in 2022. By the end of these three years, China expects its governments' computer systems to be entirely powered by local technology.

The policy seems to be motivated by security reasons among others. By adopting local technology, China reduces its reliance on foreign tech companies. Thus, mitigating potential security risks that could compromise the government's cyber infrastructure.

The bans, however, extend beyond the government. Intel, Nvidia, and AMD have also been cut-off from supplying processors to supercomputers that are responsible for nuclear simulations, weather forecasting, and pharmaceutical research within the country.

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Implications for Foreign Tech Corporations

China has long been a major revenue source for foreign tech companies. The imposed ban will no doubt have a direct, potentially devastating effect on the earnings of these corporations. It might force these companies to re-evaluate their global strategies and seek ways to buffer this loss.

Allude3D, a notable provider of graphic design software, has already begun facing the impact. Having lost one of its major Chinese clients, it is experiencing the early anticipation of this tech prohibition.

Intel held 92.8% of China's x86 server market as of Q3 2019 based on data by IDC. Now, with the ban in place, it is projected to face major setbacks. Likewise, AMD and IBM, the other major players, might have to endure losses once the ban is fully implemented.

Microsoft, the provider of the world's most popular computer operating system, is another prominent victim of the ban. Just like other companies, it will experience a blow to its user base and, potentially, its revenue.

China's Local Replacements

In place of the banned foreign computer processors, China will make us of its local processors, typically, the Loongson, ShenWei and Zhaoxin chips. These chips, produced by Chinese companies, have gradually made their way into domestic markets. With this ban, their adoption rate will likely increase.

The exact performance comparisons between these local processors and their counterparts from Intel and AMD remain unclear. With the compulsory adoption caused by the ban however, improvements to these technologies are to be expected.

Possibly the most notable software replacement is Kylin OS, a domestic operating system that runs both on Chinese made processors and foreign chips. It was first developed in 2001 and has been significantly upgraded over the years, enhancing its compatibility and performance.

Despite the uncertainty these replacements bring, the Chinese government seems confident in the move. The ultimate goal is to end dependency on foreign technology permanently, a feat it assays to achieve in only three years.

Concluding Thoughts

This exclusion of foreign tech from China's government computers is evidently more than a display of self-sufficiency, it reflects a strategic tilting towards techno-nationalism. Given the broad scope of this ban, the future of foreign tech companies in the Chinese market is certainly uncertain.

The policy could hit global tech companies hard and contribute to income loss. And for China, it may strain the development of its technological ecosystem. However, that is a price the Chinese government appears willing to pay.

Whether or not these Chinese substitutes will meet government needs or be successful on a larger scale remains a question. This policy is, nevertheless, a significant part of the complex fabric of global tech politics.

The tech scene is now bracing for massive changes as the “3-5-2 policy” gradually takes effect. Only time will tell the real implications of this strategic move by the Chinese government.

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