China Orders Firms to Stop Using U.S. and Israeli Cybersecurity Software Amid Security Concerns

Chinese authorities have recently directed domestic companies to halt the use of cybersecurity software from roughly a dozen major U.S. and Israeli firms, a move that underscores Beijing’s growing focus on national security, technology independence and geopolitical competition with the United States and its allies.

According to people familiar with the matter, the order — issued in early January 2026 — instructs Chinese firms to eliminate software from several well-known overseas cybersecurity providers over concerns that such products could collect and transmit sensitive data out of the country, potentially exposing local systems to foreign access or surveillance.

Which Companies Are Affected

The ban affects products from some of the most prominent names in cybersecurity. Among the U.S. firms whose solutions are reportedly no longer to be used are:

• VMware (a Broadcom-owned business)

• Palo Alto Networks

• Fortinet
  

Israeli cybersecurity provider Check Point Software Technologies is also among the companies named in the directive.

Sources say that the notice, which was shared with domestic corporate networks in recent days, was broad but did not specify exactly how many companies or which sectors received it. The authorities behind it — including China’s internet regulator, the Cyberspace Administration of China (CAC), and the Ministry of Industry and Information Technology (MIIT) — have not publicly commented on the policy or responded to requests for clarification.

Stated Rationale: National Security and Sovereignty

Beijing’s directive appears to be rooted in national security concerns. Government officials reportedly fear that software developed by Western companies — particularly products with deep access to network infrastructure and endpoints — could be exploited to siphon confidential information or be coerced into facilitating foreign intelligence activities.

China’s leadership has frequently emphasised that its domestic digital ecosystem must be resilient against foreign influence, especially in areas as sensitive as cybersecurity, data protection and critical infrastructure. Historically, foreign cybersecurity tools are designed to monitor, scan and even automatically route threat data to cloud platforms for analysis — characteristics that, from Beijing’s perspective, could create vulnerabilities if data is stored or processed outside national borders.

The move aligns with long-standing efforts by Chinese policymakers to reduce dependence on Western technology and strengthen homegrown alternatives. Over the past several years, Beijing has pushed for self-sufficiency in semiconductors, cloud computing, artificial intelligence and other high-tech sectors — a priority that has accelerated amid ongoing U.S. export curbs and broader strategic competition.

Broader Geopolitical and Tech Tensions

The ban arrives during renewed geopolitical tensions between China and the United States, with both governments vying for influence in global technology markets. As the U.S. and China prepare for expected diplomatic engagements — including a planned visit by U.S. President Donald Trump to Beijing in April 2026 — issues such as cybersecurity, trade policy and technology security remain central.

China has long been wary of Western technology firms’ presence on its networks. In the West, similar fears have led to restrictions and scrutiny of Chinese firms; for example, Russian cybersecurity software maker Kaspersky Lab was barred from U.S. government systems amid allegations of potential ties to foreign intelligence agencies.

Domestically, the directive could accelerate the adoption of homegrown cybersecurity solutions. Chinese companies such as 360 Security Technology and Neusoft may see increased demand as enterprises seek to replace foreign tools with locally developed software. This shift mirrors broader government priorities to bolster indigenous innovation and digital infrastructure resilience.

Market and Industry Response

Financial markets reacted quickly to the news. Shares of impacted firms such as Broadcom, Palo Alto Networks and Fortinet experienced notable declines in U.S. trading following the report about Beijing’s directive — reflecting investor concern over the potential loss of business in one of the world’s largest technology markets.

Some of the affected companies have stated that they have limited or negligible business exposure in China, or do not sell certain enterprise products there, suggesting that the immediate commercial impact might vary significantly by company. Other vendors have yet to comment publicly.

Domestic Alternatives and Chinese Tech Policy

China’s cybersecurity sector has grown substantially in recent years, with locally developed tools and platforms increasingly deployed across government, enterprise and industrial systems. Companies like Neusoft and 360 Security Technology have positioned themselves as domestic champions capable of meeting a wide range of network security needs without relying on foreign technology.

Beijing’s directive also mirrors long-term policy goals: to build a secure digital ecosystem that can operate independently of Western infrastructure, tools and cloud services. Analysts say that part of this strategy involves not only replacing foreign software but also nurturing domestic ecosystems that can innovate and compete internationally.

Potential Implications and Outlook

If broadly enforced, the ban could reshape how cybersecurity operates within Chinese digital environments. Enterprises and government entities will likely need to audit their cybersecurity stacks, remove prohibited software and accelerate migration to approved domestic tools — a process that could require significant investment, training and integration work.

Beyond corporate networks, the directive could signal a deeper decoupling between Chinese and Western technology ecosystems, especially in areas like cybersecurity, artificial intelligence and data infrastructure. Observers note that while such policies enhance national control, they could also fragment standards and increase barriers for cross-border technology collaboration.

The directive from Beijing underscores just how critical technology — and specifically trusted cybersecurity infrastructure — has become in global geopolitics. As Washington and Beijing jockey for technological supremacy, policies like this will likely play a defining role in shaping the future of international tech relations, supply chains and digital sovereignty.