REFILE-In U.S.-China tech war, investors bet on China's localisation push
SHANGHAI, Aug 20 (Reuters) - As the U.S.-China "tech war" widens, investors are betting on China's efforts to replace U.S. technologies with indigenous applications to run networks in the state sector.
An index tracking Chinese IT stocks has jumped nearly 30% this year, doubling blue-chip gains. "Any segment that faces decoupling risks represents big investment opportunities."
Under U.S. pressure, Chinese vendors are poised to gain local market share, said Jie Lu, Robeco's China research head.
Dongxing Securities predicted that a retooling would create a 1 trillion yuan ($144.46 billion) opportunity over the next three years for local vendors.
Local governments are rushing to form industry federations to promote the use of Huawei's Kunpeng processing technologies.
Last week, China Unicom's Wuchang subsidiary struck a partnership with Huanghe Technology, which makes servers and PCs using Kunpeng technologies. In May, IT distributer Digital China said it was building plants to make PCs and servers using Kunpeng CPUs.
Also in May, China Telecom said it would procure up to 56,314 servers in 2020, one-fifth of them using Kunpeng and Hygon Dhyana chips, which rival U.S. brands Intel and AMD in a move seen as a gesture of Beijing's localisation push.
"China must promote domestic replacement to avoid being strangled, even as its current technology lags by far," Zhang Chi, chairman of Xin Ding Capital said during an investor roadshow for Haigon Information Technology, maker of Hygon Dhyana chips.
Zhang expects Chinese government agencies to replace all computers using U.S. chips in the next five years, echoing views of many analysts.
National Software & Service, which makes operating systems that compete with Windows and middleware that aims to rival IBM and Oracle, expects revenue this year to jump 70% to 10 billion yuan.
Beijing Kingsoft Office Software this week posted a 143% jump in first-half profit and said China's need for information security is boosting sales.