The aim of the move is reportedly to increase China’s reliance on home-made technologies. But this is likely to hit US companies such as HP, Dell and Microsoft hard. Analysts at Jefferies say that US technology companies generate as much as $150bn a year in revenues from China.
Paul Triolo of consultancy Eurasia Group told the FT: “The goal is clear: getting to a space largely free of the type of threats that ZTE, Huawei, Megvii, and Sugon now face.”
This comes after US President Donald Trump’s administration banned US companies from doing business with Chinese telecoms equipment maker Huawei earlier this year.
The ban also covered ZTE, a telecoms company, along with Hikvision and Dahua, manufacturers of surveillance cameras and Hytera, which produces two-way radios.
Washington was said to be concerned about Chinese technology companies helping the government to conduct cyber espionage.
Huawei was a particular concern as it helped build ultra-high-speed 5G networks around the world.
Jacob Wood, spokesperson for the White House budget office, said: “The administration has a strong commitment to defending our nation from foreign adversaries, and will fully comply with Congress on the implementation of the prohibition of Chinese telecom and video surveillance equipment companies, including Huawei.”
Analysts at China Securities, a broker, have also estimated that around 30 million pieces of computer hardware will need to be removed now, with large-scale replacement beginning next year.
The analysts added it will be difficult to replace software with domestic alternatives, because most software vendors develop products for popular US-made operating systems such as Microsoft’s Windows and Apple’s macOS.
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China’s homemade operating systems, such as Kylin OS, have a much smaller ecosystem of developers that make compatible software.
Meanwhile, China said today that it hoped to make a trade deal with the US as soon as possible.
This comes amid intense discussions before fresh US tariffs on Chinese imports are due to kick in at the end of the week.
Beijing hopes it can reach a trade agreement with the US that will be beneficial to both sides, Assistant Commerce Minister Ren Hongbin told reporters.
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He said: “On the question of China-US trade talks and negotiations, we wish that both sides can, on the foundation of equality and mutual respect, push forward negotiations, and in consideration of each others’ core interests, reach an agreement that satisfies all sides as soon as possible.”
The two countries are negotiating a “phase one” deal aimed at de-escalating their trade dispute, but it is unclear when an agreement can be reached.
Washington’s next round of tariffs against Chinese goods are scheduled to take effect on December 15.
But China has demanded that some of the existing US tariffs imposed on about $375 billion worth of its exports be removed, in addition to cancellation of the tariffs on $156 billion of its remaining exports to the US.
White House economic adviser Larry Kudlow said on Friday that the two sides had talked almost daily, but there were currently no plans for face-to-face talks or a signing ceremony between Mr Trump and Chinese President Xi Jinping.
With less than a week to go before the deadline amid “intense” negotiations, Mr Kudlow said Trump would make the final decision on the tariffs, which would hit Chinese-made mobile phones, laptop computers, toys and clothing.
Mr Trump said last week: ”We’ll have to see, but right now we’re moving along.
“On December 15th, something could happen, but we are not discussing that yet. We are having very good discussions with China, however.”
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China orders all American computers to be trashed as China-US trade war deepens - Express.co.uk
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