Date
20 August 2017
Cisco Systems, which in 2012 counted 60 products on the state procurement list, had no products on the list as of late 2014. Photo: Bloomberg
Cisco Systems, which in 2012 counted 60 products on the state procurement list, had no products on the list as of late 2014. Photo: Bloomberg

China drops top tech brands from state shopping list

China has dropped some of the world’s leading technology brands from its approved state purchase lists, while including thousands more locally made products, Reuters reported.

The shift could be the government’s response to revelations of widespread Western cybersurveillance or part of its effort to shield the domestic technology industry from competition, the news agency said.

Among the biggest losers is US network equipment maker Cisco Systems Inc., which in 2012 counted 60 products on the Central Government Procurement Center’s (CGPC) list. It had no products on the list as of late 2014, a Reuters analysis of official data shows.

Smartphone and PC maker Apple Inc., Intel Corp.’s security software firm McAfee and network and server software firm Citrix Systems also vanished from the list.

The number of products on the list, which covers regular spending by central ministries, jumped by more than 2,000 in two years to just under 5,000, but the increase is almost entirely due to the entry of more local makers.

The number of approved foreign tech brands fell by a third, while less than half of those with security-related products survived the cull.

A CGPC official said there were many reasons why local makers might be preferred, including sheer weight of numbers and the fact that domestic security technology firms offered more product guarantees than overseas rivals.

China’s change of tack coincided with leaks by former US National Security Agency contractor Edward Snowden in mid-2013 that exposed several global surveillance programs, many of them run by the NSA with the cooperation of telecom companies and European governments.

“The Snowden incident, it’s become a real concern, especially for top leaders,” said Tu Xinquan, associate director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing. “In some sense the American government has some responsibility for that; [China's] concerns have some legitimacy.”

Industry insiders also see in the changing profile of the CGPC list a wider strategic goal to help domestic tech firms get a bigger slice of China’s information and communications technology market, which is tipped to grow 11.4 percent to US$465.6 billion in 2015, according to tech research firm IDC, the report said.

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