Oracle chief says US software giant’s China expansion on track despite Beijing protectionism, market slump

Oracle, the world’s second-biggest software company, is betting on increased investment in manpower, research and development to fuel its growth in mainland China, despite Beijing’s drive to promote indigenous information technology suppliers.

“It’s very important to get our technology China-ready, and make sure we have the ability to sell and support our products in the country. Those are our primary investments,” Oracle co-chief executive Mark Hurd told the South China Morning Post.

“You hear quite a bit of rhetoric about de-investing in China for whatever reasons.  So as others do something else, the opportunity to invest becomes more interesting for us.”

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Hurd’s optimistic perspective, however, may not be fully shared by other foreign information technology suppliers in mainland China, following the government’s recent adoption of a new National Security Law that calls for official review of “any foreign investment, key technologies, internet and information technology products and services and other important matters and activities that impact or are likely to impact national security”. 

United States-based think tank the Information Technology and Innovation Foundation last month described the law as “part of a strategic effort to reduce the market share of foreign IT companies in China in order to build up the capacities of Chinese-owned IT companies”.

Stephen Ezell, a senior analyst at the foundation, previously said that mainland China “has been trying to find ways to replace foreign-produced information and communications technology products with domestically produced ones going back to the country's indigenous innovation government policies, which began as early as 2009”.

While details about the national security law’s practical implementation remain unclear, it represents a big obstacle for foreign technology suppliers to stay relevant in the world’s third-biggest information technology market after the United States and Japan.