China plans to replace foreign computer hard- and software with domestic products in three years’ time, in a potential blow to companies like HP, Dell and Microsoft. The Global Times reported that the move is part of a broader campaign to increase China’s reliance on home-made technologies, and is likely to fuel concerns of “decoupling,” as supply chains between the U.S. and China are being severed. Shen Yi, Professor at Shanghai-based Fudan University, said that linking the issue with trade was unprofessional, because long before the China-U.S. trade war, the Chinese government had already started to reduce its reliance on foreign-made equipment step by step. The Financial Times, which first published the story, also quoted analysts at China Securities, saying that a broker estimated that 20 million to 30 million pieces of hardware will need to be swapped as a result of the Chinese directive, with large scale replacement beginning next year.

China Standard Software Co (CS2C) and Tianjin Kylin Information Co (TKC) will jointly build a domestic operating system, according to the China Electronics Corporation (CEC). The NeoKylin Linux operating system developed by CS2C and the Kylin server operating system developed by TKC are the two most important domestic operating systems in the market. The NeoKylin Linux operating system fully supports mainstream open-hardware platforms at home and abroad, covering both server and desktop versions, and it is compatible with more than 4,000 software and hardware products, said Han Naiping, General Manager of CS2C.

In the contest between the U.S. and China for technological dominance, the latest battle is taking place under the Pacific Ocean with the laying of undersea cables to connect the Pacific Island countries. Of the 378 cables currently operating worldwide, 23 are under the Pacific. But many of these cables run right by Pacific Island nations on their paths between hubs in Los Angeles, Tokyo and Singapore. Just half a million of the 11 million people living in Pacific Island countries and Papua New Guinea – less than 5% – have access to a wired internet connection and only 1.5 million to a mobile connection. More than USD4 billion worth of cables are to come into service by 2021. Chinese tech firms like Huawei have divisions devoted to undersea connectivity that have laid thousands of kilometers of cable, and Chinese state telecommunication companies such as China Unicom have access to many of the existing trans-Pacific cables.

Meanwhile, Huawei has secured an important vote of trust, with Telefonica Deutschland selecting it as a key telecom equipment supplier for its 5G network, alongside Finland’s Nokia. This led Chinese analysts to conclude that Washington’s intensified efforts to ban Huawei on groundless accusations will ultimately fail. Part of the Spanish Telefonica group, Telefonica Deutschland said in a statement that the deal still has to be approved by German authorities, who are currently finalizing the security rules for telecom equipment suppliers. The company has followed in the footsteps of Switzerland’s Sunrise which has already launched its Huawei-powered 5G network. Sunrise has so far rolled out 5G services in more than 262 Swiss towns and cities, and over 50% of telecom equipment in its 5G core and radio networks is provided by Huawei.

But the company also suffered a setback, as Norway’s Telenor picked Swedish firm Ericsson to build its next-generation network after an extensive security evaluation. It would still use Huawei to maintain its 4G network. The Chinese ambassador in Berlin, Wu Ken, added to the controversy by threatening “consequences” if Huawei was excluded from supplying equipment to Germany’s 5G network. German lawmakers are preparing a bill that would ban on “untrustworthy” 5G vendors, without explicitly naming Huawei. Ambassador Wu said it was important that Chinese companies were not discriminated against. “Can we also say that German cars are not safe because we’re in a position to manufacture our own cars? No, that would be pure protectionism,” he said.