NSA spying scandal accelerating China’s push to favor local tech vendors

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While China’s demand for electronics continues to soar, the tech services market may be shrinking for U.S. enterprise vendors. Security concerns over U.S. secret surveillance are giving the Chinese government and local companies more reason to trust domestic vendors, according to industry experts.

The country has always tried to support its homegrown tech industry, but lately it is increasingly favoring local brands over foreign competition.

Starting this year, the nation’s government tenders have required IT suppliers to source more products from local Chinese firms, said an executive at a U.S.-based storage supplier that sells to China. In some cases, the tenders have required 50 percent or more of the equipment to come from domestic brands, said the executive, who requested anonymity.

Recent leaks by former U.S. National Security Agency contractor, Edward Snowden, about the U.S.’s secret spying program aren’t helping the matter. “I think in general China wants to favor local brands; they feel their technology is getting better,” the executive said. “Snowden has just caused this to accelerate incrementally.”

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