According to government tenders, research documents, and four people familiar with the situation, China has increased expenditures to substitute domestically produced technology with Western-made equivalents as Washington tightens restrictions on high-tech exports to its rival.
Details of tenders from the military, administration, and state-affiliated organizations are being reported by Reuters for the first time, and they demonstrate a rapid increase in domestic substitution since last year.
According to two people with knowledge of the sectors, China has been spending a lot of money replacing computer equipment, and the financial and telecom sectors are likely the next targets. According to a review of their findings, state-backed researchers also found that digital payments were particularly susceptible to potential Western hacking, which suggests that efforts to indigenize such technologies are likely.
In the 12 months following September 2022, the number of tenders from government and military agencies, state-owned enterprises (SOEs), and other entities to nationalize equipment doubled to 235 from 119, according to a finance ministry database viewed by Reuters.
Around three times as much as the previous year, or 156.9 million yuan, was the value of awarded projects that were recorded on the database during that same period.
The database is the largest collection of state tenders that is publicly available, and it mirrors data from third parties, even if it only represents a small portion of tender bids countrywide. According to IT research firm First New Voice, China replaced foreign hardware and software for 1.4 trillion yuan ($191 billion) in 2022, a 16.2% rise from the previous year.
