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China orders removal of foreign hardware, software from government offices

China ordered all government agencies and public institutions to remove foreign computer equipment and software from their offices within three years, London's Financial Times reported.

The directive, which echoes Washington's attempts to limit the use of Chinese technology, is a potential blow to U.S. tech companies such as HP Inc., Dell Technologies Inc. and Microsoft Corp. It is estimated that 20 million to 30 million pieces of foreign-made hardware will need to be replaced, starting in 2020.

About 30% of the hardware will be substituted with local products in 2020, 50% in 2021 and 20% in 2022, according to analysts cited in the report. However, some analysts noted that it will be difficult for China to find domestic alternatives for software and operating systems such as Microsoft's Windows and Apple Inc.'s macOS.

The order is part of China's broader campaign to boost reliance on homegrown technologies, which echoes analysts' expectations that Beijing will make a move to reduce its dependence on the U.S. market.

Last month, China announced the creation of a US$21 billion state-backed fund to bolster its manufacturing industry. Beijing also established a 204 billion yuan fund in October, which will be invested in the local semiconductor industry.

As of Dec. 9, US$1 was equivalent to 7.04 Chinese yuan.