The tit for tat trade war between the U.S. and China just entered a new stage, with the Chinese government reportedly banning government workers from using technology products made by U.S. companies.
The Financial Times reported all government offices and public entities have three years to get rid of any software and computer hardware that comes from a foreign company. The report pointed to HP, Dell, and Microsoft among the tech companies that could get hit hard from the directive.
China's move comes after the Huawei ban
The move comes a few months after the White House added Chinese telecom company Huawei to a blacklist, preventing government agencies and domestic companies from doing business with it. A proposal is making the rounds in the U.S. that would require any technology coming from a country deemed a "foreign adversary" to undergo a vetting process with an eye toward protecting national security.
According to the report, the U.S. has also been calling on European countries to halt any 5G infrastructure projects with Huawei.
The Financial Times noted the ban on foreign tech products is part of a move on the part of Beijing to rely more on technology made in the country rather than from foreigners.
Policy gets coined 3-5-2
According to the report, China Securities, a Chinese broker, said there are about 20 million or 30 million different pieces of computer hardware that would need to be swapped out in the three year period. They predicted 30% of the replacements will happen in 2020, 50% in 2021 and 20% in 2022. The directive was reportedly issued by the Chinese Communist Party's Central Office earlier in 2019. As a result of the time frame to replace foreing hardware and software, the policy is known as the 3-5-2.
While China has been pushing to use technology from local vendors since 2017 when it passed its cybersecurity law, the initiative has picked up steam as the trade war and sanctions with the U.S. increase.