China Market Has Been Lost. Thanks, NSA!

The China Market Has Been Lost. Thanks, NSA!

China is Planning to Purge Foreign Technology and Replace With Homegrown Suppliers

China is aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020, stepping up efforts to shift to Chinese suppliers, according to people familiar with the effort.

The push comes after a test of domestic alternatives in the northeastern city of Siping that was deemed a success, said the people, who asked not to be named because the details aren’t public. Workers there replaced Microsoft Corp.’s Windows with a homegrown operating system called NeoKylin and swapped foreign servers for ones made by China’s Inspur Group Ltd., they said.

The plan for changes in four segments of the economy is driven by national security concerns and marks an increasingly determined move away from foreign suppliers under President Xi Jinping, the people said. The campaign could have lasting consequences for U.S. companies including Cisco Systems Inc., International Business Machines Corp., Intel Corp. and Hewlett-Packard Co.

“The shift is real,” said Charlie Dai, a Beijing-based analyst for Forrester Research Inc. “We have seen emerging cases of replacing foreign products at all layers from application, middleware down to the infrastructure software and hardware.”

This is not going to work out well for anyone.

It began with the U.S. government flinging accusations at Huawei.

Will it end with all Chinese products being suspect?

It’s bad enough that some products from China are pre-loaded with malware — but that kind of thing can be detected.

What happens if China policy dictates State-created malware be installed — or China’s version of the NSA just intercepts shipments to foreign countries and loads their own undetectable malware? That’s what the NSA has done! And that revelation freaked out China enough to make this move.

If Xiaomi thought entering the American market would be difficult — that difficulty has just been increased at a level that now can’t even be calculated.

Espionage has to get the fuck out of free enterprise. This is going to have economic repercussions that will screw everybody.