The WSJ reports that China is on an extensive push to drive out Western tech companies from the country and replace them with domestic alternatives. China reportedly started its domestic expansion in 2022 with a highly secretive “Document 79,” an initiative focused on deleting Western tech companies from the country. Since then, China’s new plan has been in full effect — domestic alternatives have replaced most Western software providers.
When initiated two years ago, Document 79 was a super sensitive document that only high-ranking officials were purportedly shown. Security was so paramount that copies of the document were not allowed to be made. The initiative set out by Document 79 is to replace foreign software in China’s IT systems by 2027, with state-owned firms required to provide quarterly updates on their progress in replacing foreign software with domestic alternatives.
Two years later, the fruits of Document 79 are now apparent. Microsoft, HP Enterprise, and Cisco’s market share in China has fallen drastically in the past several years. In 2018, HP Enterprise had a 14.1% market share in China, but in 2023, that has fallen to just 4%. Cisco’s market share has halved in the past five years down to just 8%. Microsoft’s Chinese sales today account for just 1.5% of the company’s overall sales.
Hopefully this means that western companies won’t keep kowtowing to their demands since they won’t be sucking on that sweet revenue teat anymore.
It’s also very good news to america’s middle class, but bad news to america’s investor class. And overall bad for america’s economic dominance relative to other nations.
Doubt. You can have biz systems compatible with Western and allied economies, or systems compatible with China and its vassal states, russia & NK. Choose one.
You can have biz systems compatible with Western and allied economies
Did you remember the controversy over
ASMEASML from the Netherlands not wanting to give in to US pressure to stop selling China their machines? Or Germany not wanting to support allied efforts to sanction Russia, because it would be a massive loss to their economy?China and its vassal states, russia & NK.
Lots of african nations will disagree with you, they’re quite happy to lend their support to Africa and Russia, as they benefit from both.
Funny how it’s “allied economies” for the US and “vassal states” for China.
It’s like it’s “expats” when UK citizens enter your country and “immigrants” if anyone else does
I don’t really care, nor do many. The hollowed out middle class would just like it if we built shit here, even if the factories were automated. Shit products coming from a shit country, at the behest of our shit business leaders and shit politicians. America’s hegemony has been over for quite some time. We’re just a paper tiger anymore with a leftover military from a bygone era. We have more aircraft carriers than the rest of the world combined, and no will to do anything constructive with the defense budget.
We’re just a paper tiger anymore with a leftover military from a bygone era.
Not entirely true. America is still the most powerful nation-state globally. Although I do think that the era of aircraft carrier fleets is probably obsolete just like the era of battleships was made obsolete right before WW2.
Better use that money to improve security to keep China from stealing it all.
Stock buy backs it is!
Wouldn’t be surprised if the CIA planted shit for China to steal.
I don’t understand how this is news to anyone. China is playing a long con game ever since the modern world order had settled. They instrumentalize capitalism against the west, keeping their corporations tightly aligned with the government and its objectives.
The first step was to appropriate the western technological advantage by providing cheap labor, but always in a partnership construct which allows them access to the actual know-how. This works/worked out perfectly for them, knowing the uncontrolled, solely motivated by greed, western corporations would be unable to resist the short term gains.
The next step was to create western economic dependence on the now largely outsourced manufacturing, giving them increasing leverage to buy into strategic assets all around the world, particularly in former third world regions.
Obviously the next step is to throw out the westerners now that they served their purpose and their economies depend on China. This allows them to build upon the acquired technological know-how and the secured assets, giving them eventual technological dominance over the rest of the world.
With the United States slowly collapsing in on itself the only hope left for the west is for Europe to get their shit together and truly integrate into an actual global player.
Let’s cut through the noise here. The idea that China has been playing 4D chess while the West plays checkers is a sexy narrative, but it misses the forest for the trees. Yes, China has masterfully leveraged the existing global system, pulling itself up from the economic bootstraps with a mix of state-driven capitalism and strategic engagement with Western technology and markets. This isn’t a con; it’s smart strategy, plain and simple. They saw an opening in the global market’s hunger for cheap labor and pounced, all while Western companies tripped over themselves to cut costs and boost quarterly earnings. Exploitative? Perhaps. But a con game? Hardly. Both sides knew what they were getting into; it was a marriage of convenience where both parties shared the bed for mutual benefit.
Now, onto this doomsday prophecy about the U.S. spiraling into oblivion. If you’re betting on American collapse, you’re going to lose your shirt. The U.S. isn’t just standing; it’s adapting and moving in ways that the naysayers seem to conveniently overlook. Post-COVID, the stats tell a story not of decline but of rebound and resilience. Unemployment’s in check, inflation fears are being managed, and domestic consumption is through the roof. Americans are spending, industries are innovating, and energy? The U.S. is sitting on an energy bonanza that makes the Middle Eastern oil sheikhs blush. Thanks to shale, the U.S. is not just energy independent; it’s a global energy heavyweight.
And let’s not forget technology. Silicon Valley isn’t just a place; it’s a global beacon of innovation. AI, biotech, quantum computing—you name it, the U.S. is at the sharp end of the spear. This innovation engine isn’t sputtering; it’s accelerating, fueled by a demographic dynamism that much of the developed world can only dream of, thanks largely to immigration.
As for Europe, casting it as the West’s last bastion against a rising China misses the point. Europe has its cards to play, sure, but don’t count the U.S. out of the game. The American economy is a behemoth, driven by internal markets, technological supremacy, and demographic vitality. Europe’s integration and strategic coherence are worth watching, but let’s not pretend it’s the only show in town.
In sum, the narrative that China’s rise comes at the expense of a declining West, and particularly a faltering U.S., is overly simplistic and frankly, wrong. We’re in a period of massive global transition, sure, but the American decline? That’s not the story being written. The U.S. is shifting gears, and the next chapter might just surprise the gloom-and-doom crowd.
I don’t necessarily believe the United States will collapse, but we can already see that it is becoming an increasingly unreliable partner that basically flip flops on all positions depending which party is in control. They are also seemingly weary of their role as global hegemon, adapting a more isolationist and inwards oriented position.
This doesn’t mean that the u.s. will break down completely, but I could see some secessionist nonsense happening in the near future, or the looming slip into religious fascism. The country has massive internal problems that hamper its ability to maintain its role as global player, aside from their direct interests.
The thing is, American politics is inherently cyclical. Yes, it’s a rollercoaster with the parties flipping policies like burgers at a BBQ, but that’s the beauty of it. This isn’t weakness; it’s the vibrancy of democracy in action. It creates a resilience, a kind of institutional elasticity that’s unique.
Now, about the U.S. pulling back from the world stage—it’s not so much isolationism as it is recalibration. America’s geography, its energy independence—these are cards other countries can only dream of. This allows for a shift in priorities without losing global influence. The world’s changing; the U.S. is just adjusting its sails, not abandoning the ship.
Talk of secession, extremism—it’s eye-catching, sure, but let’s not get carried away. The U.S. is facing challenges, absolutely. Polarization, debates on its identity and role globally, these are serious. But remember, the U.S. has navigated through civil wars, major economic depressions, and profound social changes. It’s not just going to crumble.
In this global game, where uncertainty seems to be the only constant, the U.S. remains a key player. It’s picking its battles, sure, but when it steps onto the field, it plays to win. The essence here is not about a retreat but a strategic pivot. The world’s a complex place, and the U.S., with all its debates and divisions, is still right at the heart of it, making moves that count.
Great non-ideological analysis.
I predict serious problems with the US economy if wealth inequality and housing affordability are not addressed. Those are the biggest problems and US leadership doesn’t seem to even want to address them.
The con was that the western companies gave over some serious IP for a decade or maybe 2 of cheap manufacturing. China was trying to industrialize for decades and essentially couldn’t do it. Walk in the western companies and they gave all the knowledge, skill, everything ($$$$) for some cheap labour ($).
Western companies think 5 years is a long term plan, so they’ll take whatever terms for 5 years (mayyybe 10 if they are unheard of long term planning) and after that is ???, but profit-now-is-everything-by-definition. But China is playing decades at a time, they are getting decades, close to a century of IP, for next to nothing in the big picture.
You’re attributing a lot of things to perfect execution without acknowledging the missteps and shortcomings of their approach.
The biggest in my mind is the domestic economic speedrun they’re ending too quickly. China has gone from cheap low tech manufacturing for the world markets to high tech affordable partner to the world markets (which is the sweet spot), to now contracting to serve only a domestic market.
They blew through the sweet spot in about 15 years where other countries sit there for 50 to 100 years. During those 50 to 100 years, you raise the standard of living for your populace, bring literacy and education levels to modern levels, stabilize your population replacement rate, and most importantly let your populace generate generational wealth. What this means is they robbed multiple generations of the benefits in a speedrun to late stage capitalism. They skipped social reforms, worker protections, environmental protections, and banking regulations. They didn’t have a long run of the good years in the sweet spot to absorb the turmoil that comes from learning these lessons an enacting reforms that the populace accept.
We’re seeing the results of this already with China’s 996 working hour system…
“The 996 working hour system (Chinese: 996工作制) is a work schedule practiced illegally by some companies in China. It derives its name from its requirement that employees work from 9:00 am to 9:00 pm, 6 days per week; i.e. 72 hours per week, 12 hours per day.” source
…the “lying flat” demotivated youth because they don’t see a path to getting ahead…
“Tang ping means choosing to “lie down flat and get over the beatings” via a low-desire, more indifferent attitude towards life.”
…and China’s dangerous population decline
“China’s population drops for second year, with record low birth rate”
Obviously the next step is to throw out the westerners now that they served their purpose and their economies depend on China. This allows them to build upon the acquired technological know-how and the secured assets, giving them eventual technological dominance over the rest of the world.
Students of history, specifically China’s history have seen this before. Historically China was regional power that thought they had everything they needed from the outside world and saw the outside as a negative not worth interacting with. They built the Great Wall to keep out the rest of the world emerging years later to find they were passed by as the world evolved without them.
If your narrative is correct, I’m shocked to that China seems to be making the same mistake again. The repeated success of large nations has been engagement with the outside world with trade. If you’re right, China doesn’t agree with that to their detriment.
hello~
westerner tech guy in China here. they haven’t thrown me out yet, but then they haven’t grown up an equivalent of we do yet either. they haven’t tried to steal it or learn our secrets either.
nope for the last 3 or 4 years they’ve asked to license it to a local firm or better yet sell it outright to them. each time the price goes up and I suspect at some point it will become so irresistible that the founders will do it.
interestingly the sanctions closed us off from a lot of big institutes and companies who faced with losing the capability entirely just went ahead and acquired a bunch of Japanese stuff and jerry rigged it together. so that sucked.
because that’s it, if we don’t sell it to them someone else will and that’ll be the end of the party for everyone.
pretty sure this has played out in history before.
use that’s it, if we don’t sell it to them someone els
The article imply they aren’t looking for another seller but to domestically develop these products they need themselves. Although it’s still probably easier for them to use products from other non-western nations.
I agree with everything you said, but I think the word “appropriate” in your second paragraph is using a better term for what they do. They straight up steal our technology. From appropriating the industrial IP used in their country when they manufacture stuff for our companies to actually stealing IP through hacking our companies, they have no qualms about where they get the tech they use. I’m not trying to imply that Chinese companies and people aren’t smart enough to develop the tech we have, but it makes good business sense to spend zero money on R&D if there are no laws stopping you from copying tech from someone who has spent that money on R&D.
Mostly agree, the manufacturing agreements played Western companies like a fiddle in the long game. But I don’t think Western companies will collapse (or Chinese companies gain dominance as you word it). We’ll end up with two competing spheres, China and the west, protecting their own internal economies.
Im worried that China isn’t content with that. Their stated goal is to become the next global hegemon, and we can see that they desire to establish their domestic rules abroad as well.
Around the world they establish secret police stations to monitor their citizens living abroad, and to ensure their narrative is dominant in western media (most recent examples: China removed about unfavorable reporting in Canada, and the completely insane agreement Hungary made to give Chinese police actual law enforcement powers in the country.
Also, two competing spheres in the past developed into the Cold War. I’m not really keen on another super polarized world flirting with nuclear war.
Well they’re going to be economically sooner or later. GDP is essentially population times efficiency. Once they get their efficiency up, there’s no way the US can compete. The population of China is just that high. Same with India if they ever get their act together.
But as for exporting their values, that’s a hard sell. The old idea was that prosperity will lead to democracy, but the US Europe are wising up to that is not going to happen. I don’t see it going very far. Selling it to Africa will be interesting.
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That shouldn’t come as a surprise. It’s just history repeating itself. USA did take tech from the British and used that to build USA hegemony. China was always planning to do the same.
Not that this always works. The USSR tried this before and the copying party worked, but bootstrapping from there never worked out.
I don’t blame them, considering how relying on American tech companies puts them in a position where America can use it as a way to pressure them… I would have done the same.
Plus Snowden’s revelations showing that the US can use them to spy on people, like they did with AT&T, Microsoft, and other US companies.
True, basically what the US is blaming China of doing. Pretty sure both are doing it, but the hypocrisy is funny.
Big we’re accusing you not because we have evidence but because it’s what we would do vibes.
It’s also a distraction for the public; by blaming China for spying, they can take up headlines which diverts public attention away from other stuff.
Are they replacing Microsoft Windows?
They’ve been using their own linux distro for years in commercial facilities. Their military has a native Chinese OS. Recent articles indicate they want to expand into using linux distros in the future.
Trust me, no one uses linux aside from a small few. Majority of Chinese software are for windows only with little to no linux support.
And ms office and all those other accounting etc programs?
There are alternatives to Microsoft Excel. It’s just they don’t have great interoperability (which wouldn’t be a giant problem if said country banned Excel outright).
LibreOffice, open office, WPS office, but is there a homegrown Chinese one? Or are they going with LibreOffice?
WPS is made by a Chinese company named Kingsoft.
Oh interesting. Maybe that.
By 2022, WPS Office reached a number of more than 494 million monthly active users and over 1.2 billion installations
Yeah maybe. Been around since 1988.
Though it says
As of 2019, the Linux version is developed and supported by a volunteer community rather than Kingsoft itself.[11]
They’re standardizing on Michaelsoft Binbows.
MikeRoweSoft. (Real name and dispute).
As much as I’d like to see broader reforms around social media, this is one of the bigger reasons of “why focus on TikTok”. Ban or force a sale.
There should also be some serious taxes on any US tech company leveraging China for outsourcing, so much so that all cost saving for cheaper labor are wiped out completely.
And here I was worried about them achieving technological dominance. Looks like they’re setting themselves up for a dark age.
I really don’t believe that. They already have all the knowledge and information they need. Now they are just preventing any spying or backdoors from western companies while western countries are still depended from chinese companies.
I only see this a calculated and strategic move where I’m not sure about the motive or end goal and I’m not sure if I even want to know. China doesn’t make as stupid choices as russia
LMAO. China is not far enough along to outpace the rest of the world. Closing markets off will stifle innovation.
Yeah it’s not like they can just buy western tech and see how it’s made :D they are quite good at spying and reverse engineering western products
Who would “they” be in this context? Only government agents? The “they” who currently steal from the west are all entrepreneurs and investors, private companies and citizens working within an open market.
I suppose if they send their agents abroad to steal technology and then transmit designs back home it could work.
Western countries getting rid of China not China getting rid of Western countries lmfao. L CCP.
