Chinese authorities have instructed domestic companies to stop using cybersecurity software from roughly a dozen U.S. and Israeli vendors over national security concerns, sources told Reuters. Named firms include Broadcom-owned VMware, Palo Alto Networks, Fortinet and Check Point. Regulators worry the products could collect and transmit confidential data abroad, and Beijing is accelerating efforts to replace Western technology with domestic alternatives.
Exclusive: Beijing Orders Firms To Drop U.S. And Israeli Cybersecurity Software Citing National Security
FILE PHOTO: Illustration shows computer motherboard
Chinese authorities have told domestic companies to stop using cybersecurity software from about a dozen vendors based in the United States and Israel, citing national security concerns, two people briefed on the matter told Reuters.
The move is part of a broader push by Beijing to replace Western-made technology with domestic alternatives as trade and diplomatic tensions with Washington escalate and both sides compete for technological leadership.
Vendors Named And Market Reaction
Sources named several U.S. vendors, including Broadcom-owned VMware, Palo Alto Networks and Fortinet, and said Israel's Check Point Software Technologies was also affected. Shares of Broadcom and Palo Alto slipped more than 1% in premarket trading after the reports, while Fortinet fell nearly 3%.
Why The Restrictions?
According to the sources, Chinese regulators are concerned the software could collect sensitive information and transmit it overseas. The sources declined to be named because of the sensitivity of the situation. Reuters could not determine how many Chinese companies received the notice, which the sources said was issued in recent days.
Official Responses And Industry Presence
The Cyberspace Administration of China and the Ministry of Industry and Information Technology did not respond to requests for comment. The named companies also did not reply to Reuters queries.
The affected firms have long-established operations in China: Fortinet lists three mainland China offices and one in Hong Kong; Check Point lists support addresses in Shanghai and Hong Kong; Broadcom shows multiple China locations; and Palo Alto lists several local offices, including one in Macau.
Wider Context
Chinese officials have for years expressed concern that foreign hardware and software could be vulnerable to exploitation by foreign intelligence services. As a result, Beijing has sought to substitute Western computer equipment and productivity software with domestic products. Major domestic cybersecurity providers include 360 Security Technology and Neusoft.
Some of the U.S. and Israeli firms that now face restrictions have previously published reports alleging China-linked hacking operations, which Beijing denies. For example, Check Point last month reported an alleged China-linked campaign targeting an unnamed "European government office," while Palo Alto has reported Chinese-linked activity targeting diplomats.
Reporting by Beijing and Shanghai newsrooms; additional reporting by Raphael Satter in Washington. Editing by Edwina Gibbs and Barbara Lewis.
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