The Chinese tech industry may have scored a small victory in its battle against the hegemony of the US technology sector. Beijing has ordered all government offices and public institutions to remove foreign computer equipment and software within three years. This comes as little surprise following US sanctions on Huawei and a ban on US federal dollars spent on Chinese telecom and surveillance equipment. But this win will be a pyrrhic one at best.

On the face of it, China’s shift to domestic hardware should mean more orders for local tech groups. Up to 30m pieces of computer hardware could need replacing as a result of the directive. Local PC maker Lenovo, currently the preferred brand in China, should get a large chunk of the orders starting next year. US rivals including HP, Dell and Microsoft would lose out. 

But all this is contingent on China speeding up the development of homemade software systems to replace US-made ones such as Microsoft’s Windows and Apple’s macOS. Removal of US suppliers would create new domestic supply chain disruptions for Lenovo and others. Already its share price has fallen a third since April partly because of component shortages.