BEIJING: Chinese authorities have instructed domestic companies to stop using software from about a dozen US and Israeli cybersecurity companies, citing national security concerns.
China believes that this software can collect sensitive and confidential information and transfer it abroad, so it is preferring its own local alternatives to Western technology.
The ban has been applied to software from American companies such as Broadcom-owned VMware, Palo Alto Networks and Fortinet, while Israeli company Check Point Software Technologies is also on the list.
After this decision, shares of American companies saw a decline, where shares of Broadcom and Palo Alto Networks fell by more than one percent, and shares of Fortinet fell by about three percent.
Chinese analysts say that Beijing fears that Western technology can be hacked by foreign powers, which is why China is moving towards self-reliance in the field of cybersecurity, computer systems and software.
China’s major domestic cybersecurity companies include 360 Security Technology and Neusoft.
Meanwhile, the US has allowed Nvidia to sell advanced artificial intelligence (AI) chips to China under certain conditions.
Nvidia will be able to sell its H200 chip to China under certain conditions, according to the US Commerce Department, but restrictions on advanced processors will remain in place. The Chinese government is encouraging the use of locally produced AI chips, which has created uncertainty about demand for Nvidia’s chips.
