Lenovo to Benefit from the PRC’s Indigenous Tech Ultimatum. Will Democratic Countries Respond?  

Early this morning, Bloomberg reported, “China has ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives.”

The directive, claims Bloomberg, is consistent with China’s “sweeping effort to reduce its dependence on geopolitical rivals such as the U.S. for everything from semiconductors to servers and phones.”

Lenovo Consolidates Chinese Market and Continues to Sell to States – Despite Military Bans  

Lenovo, the global PC manufacturer partly owned/controlled by the Chinese government, will profit most from the ban as the central government replaces 50+ million PCs, with many more sales to come from provincial governments.

Ironically, the Bloomberg report speculated that Beijing is concerned about security, yet the State Department, Department of Homeland Security, and Joint Chiefs of Staff Intelligence Directorate have banned Chinese-made technologies for fear of security vulnerabilities that can be exploited. (For details, read the DOD IG Report from July 2019 or China Tech Threat’s March 2020 white paper.)

Unfortunately, even while the PRC directs their government to use only Chinese products, and while these same products are frequently banned by US military and intelligence agencies, nearly 40 states continue to purchase the suspect technology.

The Associated Press recently reported that the Chinese government had hacked at least six states leading one expert to note, “If we know that six states were breached by Chinese spies, it means we know 44 states probably have Chinese spies operating on their network that we don’t know about.”

Thankfully, some states are taking notice. Just yesterday, Georgia Governor Brian Kemp signed a law to prohibit state contracts with companies owned by the Chinese Communist Party. Still, much more action is needed.

Democratic vs. Autocratic: Will Countries Compete in Security and Innovation?

CTT Co-Founder Dr. Roslyn Layton believes that China’s directive is “not surprising, but an easy excuse to boost domestic production.” She adds, “there should be no pretense that the choice of product is made on the basis of quality.”

After all, Bloomberg also reported last November that the PRC was “quietly empowering a secretive government-backed organization to vet and approve local suppliers in sensitive areas from cloud to semiconductors.”

China’s edict forecasts a separating of democratic countries (the U.S., the UK, Japan,, etc.) and nondemocratic countries (China, Russia), ultimately leading both camps to collaborate on security and innovation in competition with the other.

Lenovo stands to replace the central government’s 50+ million PCs, while continuing to profit from sales to U.S. states. It is time for America to finally wean itself from its dangerous reliance on Lenovo, Lexmark, and other PRC-owned technology manufacturers.