China is in the process of replacing all Western technology with locally made alternative products. This transition is expected to be completed in 2027.
According to a Wall Street Journal report, this project is outlined in an initiative called 'Document 79' which was published in 2022. This super secret initiative aims to remove all Western technology from IT systems in China.
It is so secret that this document can only be accessed by high-ranking government officials and the contents of the document cannot be copied. All state-owned companies are required to provide quarterly updates on their progress in replacing foreign software with domestic software.
Since taking effect two years ago, this initiative has begun to bear fruit. The market share of Western technology giants such as Microsoft, HP Enterprise and Cisco in China has fallen drastically in recent years.
In 2018, HP Enterprise controlled 14.1% market share in China, but that figure will shrink to 4% in 2023. Meanwhile, Microsoft's sales in China only contributed 1.5% of the company's total sales.
Most Chinese companies now prefer domestically made technology even though foreign products are still superior. For example, Chinese companies that used to buy IBM rack servers are now switching to local rack servers that use Huawei chips.
Chinese tech giant WeChat is also following this trend. They switched from hosting and data management solutions offered by Oracle, IBM and Microsoft to local solutions from Huawei and Alibaba, as quoted from Tom's Hardware, Wednesday (13/3/2024).
Apart from hardware and business solutions, the effects of the Document 79 initiative are also being felt in China's software ecosystem. The KylnOS operating system made in China is claimed to be equivalent to Windows 7.
The WSJ report revealed that companies from China controlled half of China's technology market for the first time in 2022. This trend is said to continue to increase, which means that most of China's technology market is controlled by local products.
