Key Highlights
- China has reportedly ordered domestic companies to stop using cybersecurity software from U.S. and Israeli vendors.
- Affected firms include Palo Alto Networks, Fortinet, VMware, CrowdStrike, Check Point, and others.
- The move reflects Beijing’s growing push to replace Western technology amid rising geopolitical tensions.
Chinese authorities have instructed domestic companies to stop using cybersecurity software from more than a dozen U.S. and Israeli firms, citing national security concerns, according to people familiar with the matter.
The directive comes as trade and diplomatic tensions between China and the United States continue to escalate, with both sides competing aggressively for technological dominance.
Beijing has increasingly prioritized replacing Western-made technology with domestic alternatives across critical digital infrastructure.
Major U.S. and Israeli Firms Affected
Sources said the ban includes products from U.S. companies such as VMware, owned by Broadcom, Palo Alto Networks, Fortinet, CrowdStrike, SentinelOne, Rapid7, McAfee, Recorded Future, and Alphabet-owned Mandiant and Wiz.
Israeli firms named include Check Point Software Technologies, CyberArk, Orca Security, Cato Networks, and Claroty, as well as Imperva, which is owned by French defense company Thales.
According to the sources, Chinese regulators are concerned that foreign cybersecurity software could collect and transmit sensitive data overseas. The notice was reportedly issued in recent days, though Reuters could not determine how many companies received it.
Market Reaction and Company Responses
The reports triggered market volatility. Broadcom shares fell more than 4%, while Fortinet dropped over 2% and Rapid7 declined more than 1%. Palo Alto Networks’ shares were largely unchanged, while Check Point closed slightly higher.
Several companies said the impact would be limited. CrowdStrike and SentinelOne stated they have no direct revenue exposure to China, while McAfee and Recorded Future said they do not operate in the Chinese market. Other firms declined to comment.
Geopolitical Context and Security Concerns
The move comes ahead of preparations for a potential visit by U.S. President Donald Trump to Beijing in April, as Washington and Beijing maintain a fragile trade truce.
Chinese analysts have said Beijing is increasingly wary that Western technology could be exploited by foreign intelligence agencies. This has fueled efforts to phase out foreign computer hardware, operating systems, and enterprise software in favor of domestic suppliers.
China’s leading local cybersecurity providers include 360 Security Technology and Neusoft, which are expected to benefit from the shift.
The politics surrounding foreign cybersecurity vendors have long been sensitive. Such software often has deep access to networks and devices, raising concerns about espionage. Similar fears previously led the United States to ban Russian antivirus firm Kaspersky from government networks and later prohibit its nationwide sales.