- New report reveals secret Chinese order limiting US software at state-owned companies
- Known as ‘Document 79,’ the order was issued in September 2022
- It is part of a broader Chinese push to limit dependence on American technology.
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China is stepping up its efforts to root out American technology in key functions, with a top-secret order limiting the use of American software, according to a new report.
Issued in September 2022, the order known as Document 79 requires state-owned companies in the financial, energy and other sectors to replace foreign software in their IT systems by 2027, the Wall Street Journal reported on Thursday.
According to the Journal, the Document 79 order is known in some circles as “Eliminate A,” short for “Eliminate America.”
The order is so secret that high-ranking officials and executives were only shown the document in person and were not allowed to make copies, people familiar with the matter told the Journal.
The move comes as part of Chinese leader Xi Jinping’s broader initiative to reduce dependence on foreign suppliers, both for economic and national security reasons.
China is stepping up efforts to root out American technology in key functions. Chinese leader Xi Jinping (above) has pushed to reduce dependence on foreign suppliers.
Microsoft’s offices in China are seen above. The latest order is an attempt to remove US software from key functions and could have a major impact on Microsoft and Oracle.
It also comes after Beijing’s escalation of retaliation with Washington on trade and technology in particular, after the United States imposed sanctions on Chinese technology companies and sharply limited the export of advanced semiconductors.
China has already taken steps to limit American hardware, including servers and network technology from companies such as Dell, IBM and Cisco.
The latest order is an attempt to eliminate American software from key functions and could have a major impact on Microsoft and Oracle, which have benefited from doing business in China during its rapid economic expansion.
“China was the land of milk and honey, and intellectual property was the main challenge,” a former U.S. Trade Representative official involved in previous technology discussions with the Chinese told the Journal.
‘Now there is a feeling that the sense of opportunity has disappeared. “Companies simply resist.”
The new directive was issued by China’s State-Owned Assets Supervision and Administration Commission, which supervises state-owned enterprises and enterprises.
China has a significant state-owned business sector, including more than 60 of China’s 100 largest listed companies.
Employees work in front of computers at Microsoft Corp. Office and Experience Center during a media event for the opening of the workspace in Hong Kong, China.
China’s push to use local technology is known there as “Xinchuang,” which loosely translates to “IT innovation.”
The policy is one of national security for Beijing, but also increasingly necessary as Washington restricts high-tech exports to China.
Last month, Chinese regulators said companies owned by the central government should play a bigger role in promoting the development of artificial intelligence in China.
Zhang Yuzhuo, party chief of the State Assets Supervision and Administration Commission of the State Council, said at a conference that central government-owned enterprises should also actively adopt the reforms brought by artificial intelligence.
They should develop next-generation artificial intelligence technologies, according to a statement published on Wednesday.
The statement adds that these companies should take measures to develop and promote AI in industrial renewal.
They should also accelerate the construction of smart computing centers, he said.