Why China Is Turning Away From Big US Tech and Looking Within

Technology

Published: June 25, 2019 9:40 am

Last Updated: January 6, 2020 3:28 am

In the past, major U.S. tech companies like Oracle and IBM have reached out to Asian — specifically Chinese — markets to sell their software and database tech, but now China seems to be turning away from these tech giants and opting to look within.

Recent trade tensions with the United States largely prompted this move and, as a result, one Chinese upstart is stepping in to take the place of these U.S. tech giants within China with its enterprise software.

The Beijing-based PingCAP already has more than 300 Chinese customers. Many, including food delivery giant Meituan, bike-sharing service Mobike, video streaming site iQIYI and smartphone maker Xiaomi, are migrating away from Oracle and IBM’s services toward PingCAP’s. Overall, this demonstrates a nation’s resurgent desire to “buy China.”

PingCAP is competing in a sector traditionally dominated by companies such as Oracle and IBM. The market is expected to grow an average 8% annually to $63 billion globally in the seven years through 2022.

Huang Dongxu, PingCAP’s co-founder and chief technology officer, commented:

A lot of firms that used to resort to Oracle or IBM thought replacing them was a distant milestone, they never thought it would happen tomorrow. But now they are looking at plan B very seriously.” IBM, which gets over a fifth of its revenue from Asia, declined to comment. Oracle, which gets about 16%, didn’t respond to requests for comment.

In the longer term, PingCAP wants to expand beyond China. Earlier this year, PingCAP was ready to embark on an expansion into the United States and said it was already in discussions for getting some prominent tech startups to use its software. However, recent trade tensions have made these prospects of winning over American clients cloudy.