Cisco: Short Circuit for Foreign Electronics Vendors

What’s hot lately in China’s electronics industry is not the latest gadget but procurement guidance from the central government that is starting to sting Western companies. That guidance can be summarized in two words: Buy local.

Several sources close to the American electronics giant Cisco Systems Inc. told Caixin that Chinese government agencies and state-owned enterprises (SOEs) have been told to “when possible” turn their backs on electronics equipment offered by overseas firms in favor of domestic company products.

Beijing’s concerns on Cisco products increased since June, when the company’s computer network routers were named by American intelligence agency whistleblower Edward Snowden as devices used by U.S. spies to monitor data traffic in China. Cisco denied the charge.

Meanwhile, in another corner of China’s electronics sector, which is by far the largest in the world, the U.S. company Qualcomm Inc. recently reported that it is being targeted for alleged anti-trust violations by the Chinese government’s National Reform and Development Commission, which has not commented. The telecom gear maker thus could join Cisco as an unwelcome vendor in China.

Read the whole article at Caixin here.