China Bans U.S. and Israeli Cybersecurity Software Over National Security Concerns

Chinese authorities have directed domestic companies to stop using software from around a dozen U.S. and Israeli cybersecurity firms, citing national security concerns.

China believes that this foreign software may collect sensitive and classified data and transmit it abroad. As a result, the country is prioritizing local alternatives over Western technology.

The ban affects U.S. companies such as Broadcom-owned VMware, Palo Alto Networks, and Fortinet, as well as Israel’s Check Point Software Technologies.

Following the announcement, shares of the impacted U.S. companies fell, with Broadcom and Palo Alto Networks dropping over 1% and Fortinet shares declining nearly 3%.

Chinese analysts say Beijing fears Western technology could be exploited for foreign cyber intrusions. Consequently, China is pushing for self-reliance in cybersecurity, computer systems, and software development. Major local cybersecurity firms include 360 Security Technology and NewSoft.

Meanwhile, the U.S. has allowed Nvidia to sell advanced AI chips in China under specific conditions. The U.S. Department of Commerce stated that Nvidia can export its H200 chip to China in limited cases, although the ban on its latest processors remains. The Chinese government is encouraging the use of domestically produced AI chips, creating uncertainty about demand for Nvidia products in the region.

This move underscores China’s broader strategy to reduce dependence on foreign technology and strengthen national cybersecurity infrastructure.