China to reduce use of foreign tech

Locally made products rise substantially on purchase list, says report

China will inevitably replace the purchase of products from foreign technology companies with those from their domestic counterparts amid the rising importance the country has attached to cyber security, experts said Thursday.

"I learned that China is approving more locally branded products while removing those from some foreign tech giants like Cisco Systems Inc and Apple Inc," Li Yi, secretary-general of the China Mobile Internet Industry Alliance, told the Global Times Thursday.

Without identifying his source, Li said he expects to see the Chinese government drop more foreign technology providers in the coming years over national security concerns.

The move will be followed by State-controlled enterprises and institutions, especially in sectors like banking, audit and aviation, he added.

"It is normal to see foreign technological providers being gradually dropped by the Chinese government in part due to national security concerns, and other countries' governments also prefer to use homegrown products," Fu Liang, a Beijing-based independent IT expert, told the Global Times Thursday.

A Reuters report on Wednesday claimed that some of the world's noted technology vendors have failed to survive the cull of China's latest approved government procurement list, citing cyber security concerns.

In the two years ending in 2014, the number of approved foreign technology brands on the Central Government Procurement Center's (CGPC) list had fallen by one-third, said the report, based on an analysis of official data not made public.

Founded in 2003 under the guidance of the State Council, the CGPC is a procurement implementing agency for China's central government organs, according to information provided on the center's website.

An unidentified CGPC official was quoted as saying that the list of products by brand and type has been approved by the Ministry of Finance.

The Global Times' efforts to get a copy from the CGPC of the latest list have failed as of press time.

The ministry also did not respond to faxed requests seeking comment on the Reuters report as of press time.

The ministry issued a notice on Wednesday which outlines a raft of priorities for government purchases for 2015, with no mention of the preference for local brands.

Among the foreign technology firms that have allegedly been dropped are US networking solutions provider Cisco, US smartphone and PC manufacturer Apple, US chip maker Intel's anti-virus software subsidiary McAfee, and Citrix Systems, a US maker of server software, the report claimed.

None of the firms could be immediately reached for comment.

Meanwhile, the Reuters report showed that the number of products of local technology brands has risen on the government procurement list.

Products on the list have increased by over 2,000 to close to 5,000, almost entirely attributed to a growing preference for local makers.

The report did not name any local technology brand.

Experts also said the growing preference for local ­makers does not mean a lockout of foreign technology brands from government purchases.

The central government did not drop all foreign brands, since some domestic brands' technologies do not meet the quality standards of their foreign counterparts, Li said. He cited Juniper Networks, a US rival of Cisco, remains on the list.

Cisco, cited in the Reuters article as being the chief casualty of the cull, is suspected of being involved in data leaks.

Cisco routers were bugged by the US National Security Agency (NSA) before being sent to customers who the agency targeted for surveillance, according to leaks exposed by Glenn Greenwald, a Guardian columnist contacted by former NSA contractor Edward Snowden, in his book No Place to Hide, published in May 2014.

The disfavor of the aforementioned US firms, if confirmed, may likely affect Chinese telecommunications equipment makers such as Huawei Technologies and ZTE Corp which already find the US market a difficult market to enter, analysts said.

Huawei and ZTE could not be reached for comment.