Chinese government agencies and public institutions must replace all foreign computer hardware and software with their own counterparts within three years, Financial Times has reported.
The impact of the move on US multinational companies like HP, Dell and Microsoft is expected to be severe. These companies are known to be supplying hardware and software to the Chinese government agencies.
The order came in form of a government directive, issued to public institutions earlier this year.
The directive, internally known as 3-5-2, will be implemented in phases. It orders all government agencies and public institutions to replace at least 30 per cent of foreign hardware and software in 2020, the year when the directive comes into effect. In 2021, 50 per cent should be replaced, leaving the remaining 20 per cent to be replaced in 2022.
The order does not yet apply to private companies, which are likely to continue buying hardware from the West.
According to the analysts, the Chinese move is probably a response to measures taken by the US earlier this year. The US government agencies have not been able to procure telecommunications hardware made by Huawei for some time.
The US government also allocates funding to government agencies willing to replace equipments from Huawei with those from competitors. Added to this, Huawei has also been placed on the Entity List, a black list of foreign companies with which US companies are not allowed to trade.