China is removing a customised version of Microsoft’s Windows 10 from some state-linked agencies, bringing forward a planned retirement of the software. The move follows an instruction from China’s Ministry of State Security, which cited data security concerns without publicly identifying the specific vulnerabilities involved.
The affected version was developed specifically for China’s government and state sector. Bloomberg reported that some state-linked entities were recently told to uninstall the software, moving its retirement forward by several months from the original February 2027 schedule.
The decision highlights Beijing’s growing effort to reduce its reliance on foreign technology in sensitive government systems. It also comes as China continues to promote domestic alternatives to foreign software, hardware and cloud services.
Microsoft, however, says it has found no problem with the product. A company spokesperson told Bloomberg that Microsoft was not aware of a security incident affecting the software and said it continues to receive regular security updates.
That leaves a key question unanswered: what security concern caused Beijing to accelerate the withdrawal?
Neither Chinese authorities nor Bloomberg’s sources have identified the specific issue. For now, the order shows that Beijing remains uncomfortable relying on foreign software in systems that handle sensitive government information.
The Windows version was built for China
The affected software is not standard Windows 10. It was developed by C&M Information Technologies, or CMIT, a joint venture between Microsoft and state-owned China Electronics Technology Group.
Microsoft and the Chinese state-owned company established CMIT in 2016 to develop a version of Windows that could meet Beijing’s security requirements. The customised edition incorporated changes intended to make the operating system suitable for government use in China.
The arrangement gave Microsoft a way to participate in China’s government software market while giving Chinese authorities greater control over the operating system. CMIT had already planned to retire the version in February 2027, but the latest directive moves that timetable forward.
The full scope of the removal is not yet public. The current reporting points to some state-linked entities rather than a blanket order covering every government computer or Windows user in China.
CMIT did not respond to requests for comment, according to reports. Chinese authorities have also not publicly explained the security concerns behind the accelerated retirement.
Domestic software stands to benefit
The decision could give Chinese operating-system companies another opportunity to expand inside the government market. Companies including Kylin Software and Tongxin Software Technology already offer domestic alternatives designed to reduce reliance on Windows.
Shares in several Chinese software companies jumped after news of the directive emerged. Hunan Kylinsec Technology and Archermind Technology both rose by the daily 20% limit, while China National Software & Service gained 10%, according to Bloomberg reporting.
The Windows move also fits a broader policy push to replace foreign technology in sensitive parts of the Chinese state. Beijing has been encouraging government agencies and state-owned companies to adopt domestic technology, particularly in areas involving sensitive information.
That effort extends beyond operating systems. China has also been pushing domestic alternatives in semiconductors and other parts of the technology stack, while US export restrictions have limited Chinese access to some advanced Nvidia AI chips. Domestic companies such as Huawei and Cambricon have benefited from that shift.
Microsoft is still operating in China
The Windows decision does not mean Microsoft is leaving China. The company has significantly reduced its operations in the country in recent years, but it continues to serve Chinese businesses through cloud and AI products.
Microsoft’s remaining business is increasingly focused on Chinese companies with international operations and their demand for cloud and AI services. Reuters reported last week that Microsoft has maintained a foothold in China despite considering a broader exit in 2023.
That creates a complicated picture for the company. Beijing is reducing the role of Microsoft’s software in sensitive government systems while Microsoft continues to find opportunities selling technology to parts of China’s private sector.
The distinction matters because the latest directive is not a general ban on Windows in China. It targets a specific customised Windows 10 edition used by some state-linked organisations, with the government accelerating a retirement that was already planned.
What remains unclear
The most important detail is still missing. Chinese authorities have not publicly identified the security concern that prompted the accelerated withdrawal, while Microsoft says it is not aware of a security incident affecting the product.
It is also unclear how far the directive will spread. The current reports concern some state-linked entities, but a wider move across government agencies or other organisations handling sensitive data would mark a more significant escalation.
For now, the decision fits a broader pattern in China’s technology policy. Beijing is reducing its dependence on foreign technology in sensitive areas while continuing to use overseas products and services where they remain commercially valuable.
For Microsoft, that leaves an increasingly narrow path in China. Its customised Windows software is being pushed out of some state-linked systems, even as its cloud and AI businesses continue to give the company a reason to remain in the market.
