Signs of Protectionism in the Land of IT

Michael Vizard

Arguably, IT has been one of the most open industries on the planet when it comes to free trade. Software and hardware products from around the globe can be found in just about any enterprise, much to the benefit of most IT organizations.


Now comes word of a letter sent by the U.S. Government and 30 industry groups representing companies from North America, Europe and Asia complaining about an edict issued by the Chinese Government that requires Chinese state agencies to favor products and technologies that contain "indigenous innovation."

It's unclear exactly what the term "indigenous innovation" means, but assuming it means at the very least made in China, it's only a matter of time before this kind of behavior escalates. In fact, there are some that say the United States started it all putting "Buy America" provisions into the Federal stimulus spending bills.

It's pretty clear how something like this could get out of hand quickly, and thereby become a major problem for IT departments. Obviously, a huge percentage of the IT gear bought every year is made in China. If things were to escalate, we might see the manufacturing of the products move to other countries. But that would take awhile, so in the short term a real trade war could be problematic.


By and large, a free trade model for IT products that don't have clear military potential has been a benefit to the advance of IT around the globe. Right now, we're a long way from a full-blown trade war. But governments tend to do short-sighted things during tough economic times, so don't be too surprised if things get a little more heated before an improved economy allows cooler heads to prevail.

Add Comment      Leave a comment on this blog post
Dec 11, 2009 9:51 AM Peter Peter  says:

Didn't we stop buying computers and chips from China for our government agencies a while back?

So when China erect similar measures it is protectionism, but when we do so, it is called security measures?

Give me a break.


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