China is accelerating its drive to reduce its reliance on foreign technologies by supporting and developing domestic alternatives.
This shift in strategy has been affected by the increasing limitations imposed by the United States government on the sale of high-tech goods to China. Because of this endeavor, there has been a rise in the number of government agencies, military organizations, and other state-connected bodies advocating for the expedited adoption of domestic personal computers, telecommunications equipment, and software.
Hundreds of Billions in the Game
According to the findings of an organization that does research in the field of information technology called First New Voice, in 2022, China allotted a total of 1.4 trillion yuan, which is equivalent to $191 billion in today’s currency. This figure represents a 16.2% rise when compared to the spending levels of the previous year.
Information Reuters got from a database kept by the Ministry of Finance shows that between September 2022 and September 2023, the number of payments and bids meant to take over equipment used by state-owned enterprises (SOEs) doubled, rising from 119 to 235. The overall value of the projects that were granted funding during this time period has tripled, reaching a total of 156.9 million yen, which is equivalent to $21.448 million. The database is the most extensive public repository of state tenders, and it corroborates information with information from independent third-party sources (such as research documents), according to the news agency. Despite the fact that it only captures a percentage of the national tender bids, the database is the most extensive public repository of state tenders.
Changing both the Hardware and the Software
A substantial chunk of China’s shift program is focused on the country’s computer hardware sector, with the ultimate goal of substituting domestically created and manufactured machines and components for those marketed under foreign brands. The telecommunications industry is also being investigated, and there are plans in the works to make the switch to technologies developed domestically in order to reduce dependency on businesses based in the West. In addition, there is an attempt being made to modernize sensitive infrastructure systems, such as the utilization of domestic intelligence-gathering equipment.
In addition, China is formulating plans to modernize a variety of software industries with solutions developed in-country. In accordance with directives to increase domestic consumption, the office software systems currently being utilized by state-owned businesses are scheduled to be replaced with locally developed alternatives. The financial technologies, notably those that govern digital transactions and banking databases, are also scheduled for an overhaul, which will stimulate the transition toward domestic software in order to strengthen security and autonomy.
As a result of the significant expansion in its enterprise business sector, which includes both software and cloud computing services, Huawei has established itself as a primary participant in the process of technological modernization that is taking place in China. The enterprise division of Huawei announced sales of 133 billion yuan ($18.181 billion) in 2022, which is a 30% increase in comparison to the sales reported in the previous year. In spite of the fact that the United States government has placed sanctions on the corporation, it is still able to survive in China thanks to the extensive variety of products it offers and the flexibility with which it deploys those items.
China Faces Challenges
In spite of the robust push toward domestic technology that is being made in China, the country is confronted with considerable obstacles, the primary cause of which is its inadequate capabilities in the production of modern chips. Because of this limitation, the nation is unable to completely implement a comprehensive substitution of local technologies for those of foreign origin. In addition, several industries, like the banking sector, have been reluctant to switch over to domestic database systems, citing worries regarding the database’s dependability and stability.