Beijing Tells Chinese Firms to Stop Using US, Israeli Cybersecurity Software, Sources Say

China has reportedly issued new instructions to domestic companies, instructing them to halt the use of cybersecurity software from the United States and Israel, according to multiple sources familiar with the matter. This move, which has not yet been officially confirmed by Beijing, signals a tightening of the country’s cybersecurity policies amid growing tensions with the West over technology, data security, and industrial espionage.
The guidance is reportedly aimed at a range of industries, including finance, energy, telecommunications, and critical infrastructure, where foreign cybersecurity tools are widely deployed. Chinese authorities are emphasizing the need to rely on domestically produced software, citing national security concerns. Sources say the decision stems from fears that foreign programs could contain hidden vulnerabilities or “backdoors” that might allow foreign governments to access sensitive information.
This development comes amid an escalating technological rivalry between China and the United States, with Israel also becoming a flashpoint due to its strong cybersecurity sector and intelligence cooperation with Washington. Both countries are known for advanced cyber capabilities, including software used globally to protect corporate networks, government databases, and critical infrastructure. By restricting the use of such products, Beijing appears to be seeking greater control over its digital ecosystem and reducing its dependence on foreign technology.
The directive reportedly affects not only private companies but also state-owned enterprises, which form the backbone of China’s industrial and technological power. Analysts suggest that compliance with the new rules could involve large-scale audits, removal of existing software, and investment in Chinese-developed cybersecurity solutions, which may not yet match the sophistication of their American or Israeli counterparts.
“This is part of a broader push by Beijing to establish technological self-reliance,” said a cybersecurity expert familiar with the developments. “It aligns with their national strategy of reducing exposure to foreign tech, particularly in sectors deemed critical for national security. While it may protect against perceived foreign interference, it also poses challenges for companies that rely heavily on these products for operational efficiency and protection against cyber threats.”
China has been steadily expanding its domestic cybersecurity industry in recent years, encouraging local firms to innovate and provide alternatives to Western software. Companies such as Qihoo 360, Huawei’s security division, and Tencent Security have been positioned as viable replacements for foreign solutions, offering enterprise-level protection for networks, cloud services, and industrial control systems. However, experts caution that shifting entire systems to domestic software could be time-consuming and costly, with potential operational risks during the transition.
The timing of the directive is significant, coming after a year of heightened cyber tensions. The United States has frequently accused Chinese state-linked actors of conducting cyber-espionage against U.S. companies and government agencies. Israeli firms, while not always state-affiliated, have also become targets due to their extensive global cybersecurity operations. Beijing’s move to limit their software usage could be interpreted as a defensive measure and a statement of technological sovereignty.
For Chinese companies, this guidance may also have broader business implications. Many multinational corporations operating in China rely on a combination of local and foreign cybersecurity tools to comply with both Chinese regulations and international standards. A forced shift away from U.S. or Israeli software could complicate compliance, disrupt supply chains, and increase operational costs.
Industry insiders say that Chinese regulators are expected to enforce strict monitoring and auditing measures to ensure compliance, though the exact timeline and penalties for noncompliance remain unclear. Companies may be required to submit reports on software usage, conduct internal risk assessments, and replace existing systems with approved domestic alternatives within a set period.
This move also raises questions about the global cybersecurity market. If China, one of the largest technology markets in the world, significantly reduces reliance on U.S. and Israeli software, it could have ripple effects on international vendors. Sales of cybersecurity solutions to Chinese clients might decline, prompting foreign firms to seek other markets or to explore partnerships with Chinese companies to maintain a presence in the country.
As tensions between China and the West continue to shape the global technology landscape, the directive represents a clear step toward digital self-sufficiency. While it may enhance national security by limiting foreign access to sensitive systems, it also highlights the growing risks of technological decoupling in an interconnected world. Companies, both domestic and international, are now grappling with the challenge of balancing cybersecurity, compliance, and operational efficiency in a rapidly evolving geopolitical environment.
The coming months will reveal how rigorously these directives are enforced and how Chinese firms adapt to the shift, which may ultimately reshape the cybersecurity industry both within China and across the globe.