Financial Times reported that the Chinese government has ordered the removal of all foreign computer equipment and software from government offices.

Not sure how that can be done with open source and other software included in the stack. But could be a new front in the trade war that has potential to cut revenue growth on software stocks in our portfolios.



By order of the lead dog: Please turn off your pocket-sized supercomputers, and here’s a replacement item for you to do all your document creation, calculations, planning and project tracking.

:hands workers a stack of paper and a box of pencils:

I’m not sure how much relevance to attribute to this. How realistic is it that they stop using US-made software? Just don’t know…

To stop using great software, most of which is US based would hurt Chinese competitiveness. More likely this is a not so subtle message for the government to start using more illegal pirated (stolen) software instead.

1 Like

I guess there’s nothing really (ultimately) stopping them from cloning said software. China doesn’t exactly have a strong stance on protecting intellectual property, so I wouldn’t put it past them to allow or even advocate for building an Office 365 clone of tools, or an equivalent to Acrobat, or whatever.

But that takes time and money, and I just don’t see why they think that really benefits them. Windows 10 and Microsoft Office is much harder to steal now – enough that it’s just not worth the effort, even for those that would otherwise steal anything, because the cost is a little more reasonable over time. Expect that to become even more so with next year’s announcement of 365 Life (the consumer subscription model for Office).

What do I know, though? What I see as irrational, short-term thinking might seem advantageous else to them. Or maybe they’re trying to spark a wave of “technological independence” through national loyalty? Except they already tried that with DRAM and other chips and never caught up. Likewise with other “innovations,” so I assume the results would be similar.

I read that Chinese directive as well. If I recall, they gave folks three years to replace of all non-domestic h/w & s/w with domestic products. It wasn’t explicit, but one would think this includes all Apple products (even though many are made in China) as well as all Android based products.

I think this is absurd. It is likely an empty threat intended as a counterweight to the US made trade war. I imagine the position will either be officially reversed as a “concession” while seeking a settlement to the trade war, or it will be generally unheeded and unenforced.

Even though I spend quite a lot of time in China, I can’t say I know much about the market for domestic s/w products. But I can say unequivocally that MS-Office is omnipresent. So too are Adobe products. I’m certain there are lots of other non-Chinese s/w products that hold a virtual monopoly in their markets.

Also, Huawei which is now the #2 mobile phone maker, uses a modified version of Android as their OS (much like Amazon uses a modified version of Android in their Fire products). I’m pretty sure I read somewhere that they do have an in-house developed OS, but so what? I don’t think any casual user cares about the OS, they care about the apps. Much like Microsoft tried to get in on the phone business with their own OS, it was a failure to launch, and because it didn’t launch, they couldn’t get developers to invest resources in porting apps to a platform with an insignificant market share.

I’m about as certain as I can be about anything in China, if the government were to really press this issue it would serve no other purpose than to vastly expand the black/gray market in mobile phones which is already robust and in operation in full view of law enforcement. It would most likely also exacerbate IP piracy of US s/w products which obviously would make the trade war that much more difficult to resolve.