China Orders Ban on US and Israeli Cybersecurity Software Citing National Security

Beijing Cites National Security in Broad Cybersecurity Software Ban

Chinese authorities have issued a directive ordering domestic companies to discontinue the use of cybersecurity software provided by more than a dozen U.S. and Israeli firms. The move, reportedly taking effect as early as January 18, 2026, is attributed to national security concerns, with Beijing fearing that foreign software could 'collect and transmit confidential information abroad'. This action marks a significant escalation in China's ongoing efforts to reduce its technological dependence on Western nations amidst heightened geopolitical and trade tensions.

Affected Companies and Scope of the Directive

The ban impacts a wide array of prominent cybersecurity providers. U.S. companies reportedly affected include Broadcom-owned VMware, Palo Alto Networks, Fortinet, Mandiant (owned by Google), CrowdStrike, SentinelOne, McAfee, Recorded Future, Claroty, Rapid7, and Wiz. From Israel, firms such as Check Point Software Technologies, CyberArk, Orca Security, Cato Networks, and Imperva (now owned by France's Thales) are also named in the directive.

While the exact number of Chinese companies that received the notice remains unclear, the directive underscores China's commitment to replacing foreign technology with domestic alternatives. Some affected companies, like Check Point Software, have stated they have not received official government notification regarding any restrictions on their operations in China.

Broader Context of Tech Rivalry and Self-Reliance

This latest ban is consistent with China's long-term strategy to achieve technological self-reliance, particularly in critical sectors. Beijing has increasingly expressed concerns that Western technology could be vulnerable to hacking by foreign powers, intensifying its push for indigenous solutions. The directive follows years of mutual accusations between China and Western firms regarding state-linked hacking and cyber espionage.

The move also comes amid ongoing trade and diplomatic tensions between China and the United States, which have seen both nations vying for supremacy in key technological areas such as semiconductors and artificial intelligence. Chinese analysts suggest that Beijing's concerns extend beyond just cybersecurity software to include Western computer equipment and word-processing software.

Implications for the Market and International Relations

The news has already impacted the stock performance of some affected companies, with shares of Broadcom, Palo Alto Networks, and Fortinet experiencing declines in premarket trading. Conversely, Chinese cybersecurity firms, such as 360 Security Technology and Neusoft, are expected to gain market share as domestic companies pivot to local suppliers.

This development adds another layer of complexity to the already strained U.S.-China relationship and highlights the rising risks for foreign technology companies operating in sectors deemed strategically sensitive by the Chinese government. Neither China's internet regulator, the Cyberspace Administration of China, nor the Ministry of Industry and Information Technology have publicly commented on the directive.