China is stepping up its efforts to eradicate US technology in key functions, with a highly secret order limiting the use of software from America, according to a new report.
Issued in September 2022, the order known as Document 79 requires state-owned companies in finance, energy and other sectors to replace foreign software in their IT systems by 2027, the Wall Street Journal reported on Thursday.
According to the Journal, the Document 79 order is known in some circles as ‘Delete A,’ short for ‘Delete America’.
The order is so secretive that high-ranking officials and executives were only shown the document in person, and weren’t allowed to make copies, people familiar with the matter told the Journal.
The move comes as part of Chinese leader Xi Jinping‘s broader push to reduce reliance on foreign suppliers, for both economic and national security reasons.
China is stepping up its efforts to eradicate US technology in key functions. Chinese leader Xi Jinping (above) has pushed to reduce reliance on foreign suppliers
Microsoft’s offices in China are seen above. The latest order is a push to purge US software from key functions, and could have a major impact on Microsoft and Oracle
It also follows Beijing’s escalating tit-for-tat with Washington on trade and technology in particular, after the US imposed sanctions on Chinese tech firms and sharply limited the export of advanced semiconductors.
China has already moved to limit US hardware, including servers and network technology from the likes of Dell, IBM and Cisco.
The latest order is a push to purge US software from key functions, and could have a major impact on Microsoft and Oracle, which have profited from doing business in China during its rapid economic expansion.
‘China was the land of milk and honey, and intellectual property was the main challenge,’ a former US Trade Representative official involved in previous technology discussions with the Chinese told the Journal.
‘Now, there is a feeling that the sense of opportunity is off. Companies are merely hanging on.’
The new directive was issued by China’s State-Owned Assets Supervision and Administration Commission, which oversees state-run companies and enterprises.
China has a significant state-owned enterprise sector, including more than 60 of China’s 100 largest listed companies.
Employees work in front of computers at the Microsoft Corp. Office and Experience Center during a media event for the opening of the workspace in Hong Kong, China
China’s push to use home-grown technology is known there as ‘Xinchuang’, which loosely translates as ‘IT innovation’.
The policy is one of national security for Beijing, but also increasingly of necessity as Washington curtails high-tech exports to China.
Last month, Chinese regulators said central government-owned enterprises should play a larger role in promoting artificial intelligence development in China.
Zhang Yuzhuo, party chief of the state-owned Assets Supervision and Administration Commission of the State Council, said at a conference that central government-owned enterprises should also actively embrace reforms brought by artificial intelligence.
They should develop new generation AI technologies, according to a statement released on Wednesday.
The statement added that these enterprises should take steps to develop and promote AI in industrial renewal.
They should also accelerate the building of smart computing centers, it said.
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