China expands AI localisation rules
- Reuters reported on April 27 that China has widened quiet localisation rules, steering new chip plants and state-backed data centres toward domestic equipment and Chinese AI chips. - Since late 2025, chipmakers seeking approval for new capacity have been pushed to source at least 50% Chinese-made tools, while some foreign-chip projects were told to rip out hardware. - The measures extend Beijing’s push to replace foreign tech during a U.S.-China truce. (reuters.com)
China has quietly expanded rules that steer new semiconductor and artificial intelligence infrastructure toward Chinese hardware. Reuters reported the measures now reach chip plants, data centres and cybersecurity software. (reuters.com) The clearest new requirement hits chip factories. Since late 2025, companies seeking approval to add capacity have been told at least 50% of the equipment in procurement tenders must be Chinese-made. (reuters.com) Projects that miss that threshold are usually rejected, Reuters reported, though officials allow more flexibility on advanced production lines where Chinese tools still lag foreign rivals. Authorities prefer the local share to rise above 50% over time. (reuters.com) A separate rule covers state-funded data centres, the warehouses of computing power used to train and run AI models. Reuters reported in November 2025 that new projects receiving any state money were told to use only domestically made AI chips. (reuters.com) For projects less than 30% complete, regulators ordered installed foreign chips removed or planned purchases cancelled, according to Reuters. More advanced builds were to be handled case by case. (reuters.com) Those data-centre rules built on an earlier push in Shanghai. The South China Morning Post reported that intelligent computing centres were first told domestic computing and storage chips should exceed 50% by 2025, and industry advisers said the quota later became national policy. (scmp.com) China has also widened the campaign beyond chips. Reuters reported in January 2026 that Chinese authorities told domestic companies to stop using cybersecurity software from more than a dozen U.S. and Israeli firms, including VMware, Palo Alto Networks, Fortinet and Check Point. (reuters.com) Officials told companies the foreign software could send confidential information overseas, according to Reuters. Several affected firms said they had little or no China revenue, while others did not respond. (reuters.com) The backdrop is Washington’s export controls on advanced chips and chipmaking gear, which tightened in 2023 and cut China off from many top-end Nvidia products. Beijing’s answer has been to force more demand toward local suppliers such as Huawei, Naura and other domestic equipment makers. (reuters.com) (scmp.com) Reuters said the policy mix has continued even during a broader U.S.-China trade truce that runs to November 2026. Beijing is easing public confrontation while still building rules that make Chinese tech the default choice at home. (reuters.com)
