China dropped some of the world’s leading technology brands including Apple Inc. (NASDAQ:AAPL) from its approved state purchase lists, replacing them with the thousands of locally made products, according to Reuters. The number of approved foreign companies on the list fell by a third while less than half of the firms with the security-related products survived the cut, says the Reuters. There is no official reason explained for the act done by the country.
Local players given preference
According to Reuters, the U.S. equipment maker Cisco had around 60 of its products on the Central Government Procurement Centre’s (CGPC) list, but towards the end of 2014 none of its products were on the list. The numbers of product on the product list almost doubled in two years, but the jump is mainly from the inclusion of local players, says Reuters.
Apart from Cisco, smartphone maker Apple Inc. (NASDAQ:AAPL) also reported a drop in its item over the period. Other leading tech firms such as Intel Corp’s security software firm McAfee and network and server software firm Citrix Systems also reported the same.
The CGPC list, details on the brand and product approved by the China’s Ministry of Finance. The list does not detail the quantity of a product purchased, and nor it is a bind on local government or state-owned enterprises, who run their own system of procurement approval.
Why Apple and others have been dropped?
The decision of dropping the leading tech firms including Apple Inc. (NASDAQ:AAPL) may be seen as a response to the reports of widespread Western cyber surveillance. Also, there is a belief that the decision from the Chinese government could be for the purpose of putting down the competition from international technologies, and protect the domestic firms.
There are speculations that the decision might be influenced by the leaks by a former U.S. National Security Agency (NSA) contractor Edward Snowden in mid-2013. The leaks exposed that several global surveillance program are operated jointly by tech firms and government.
“The Snowden incident, it’s become a real concern, especially for top leaders,” Tu Xinquan, Associate Director of the China Institute of WTO Studies at the University of International Business and Economics in Beijing told Reuters. The experts view might be correct as in recent times cyber security has been a significant irritant in the U.S.-China ties, with each side accusing the other.