China has prohibited domestic companies from using software sold by Israeli and American cybersecurity firms due to national security concerns. The move is the latest amid ongoing tensions between the two global superpowers and Uncle Sam’s ally in the Middle East.
Authorities in Beijing are concerned about surveillance and that the foreign tech could collect and transmit confidential information from local firms. Sources informed Reuters about China’s new prohibitions this week.
The directive, issued in recent days by bodies like the Cyberspace Administration of China, targets firms amid Beijing’s push for tech self-sufficiency, fearing data leaks abroad. It affects roughly a dozen vendors, accelerating the replacement of Western tools with domestic alternatives in sectors like semiconductors and AI.
On Wednesday, several affected companies saw stock declines amid the news. Broadcom Inc (NASDAQ: AVGO), owner of VMware — a U.S. leader in virtualization and cloud infrastructure — fell by over 4 per cent. This company has the strongest presence in China of the lot with six locations.
Additionally, U.S. network security provider Fortinet Inc (NASDAQ: FTNT) (FRA: FO8), which has multiple Chinese offices, dropped about 2.7 per cent.
Palo Alto Networks Inc (NASDAQ: PANW), a top U.S. firm in firewalls and cloud security, dipped 2.5 per cent initially but closed nearly flat. Moreover, Israel’s Check Point Software Technologies Ltd (NASDAQ: CHKP) (FRA: CPW), a pioneer in firewall tech, slid around 1 per cent before recovering slightly.
And furthermore, Crowdstrike Holdings Inc (NASDAQ: CRWD) (FRA: 45C), a U.S. endpoint protection specialist, and Israeli identity security firm Cyberark Software Ltd (NASDAQ: CYBR) (FRA: CYB) saw minor dips of about 1 to 1.2 per cent.
Other listed firms like SentinelOne Inc (NYSE: S) (FRA: 7B0) and Rapid7 Inc (NASDAQ: RPD) (FRA: R7D) experienced losses under 2 per cent.
According to the sources, Chinese officials have also chosen to ban domestic usage of Mandiant and Wiz — owned by Alphabet Inc (NASDAQ: GOOGL) (LON: 0RIH) — and Recorded Future, Claroty, McAfee, Thales SA (OTCMKTS: THLEF)-owned Imperva and Israel’s Orca Security and Cato Networks.
This ban exacerbates U.S.-Israel-China tensions, building on mutual hacking allegations, U.S. export curbs on chips, and Beijing’s scrutiny of foreign tech. It follows U.S. bans on Chinese firms like Huawei and mirrors retaliatory moves amid an uneasy trade truce as Trump’s planned Beijing visit in April looms.
The U.S. and Israel lead globally in cybersecurity innovation, with firms boasting ties to intelligence agencies. These connections have evidently raised concerns among the Chinese and others about potential backdoors or espionage.
China is telling domestic firms to stop using a list of US and Israeli cybersecurity software on “national security” grounds, per Reuters.
Names cited include Broadcom-owned VMware, Palo Alto Networks, Fortinet, and Israel’s Check Point.
The concern,… pic.twitter.com/LXexPfjgTl
— Wall St Engine (@wallstengine) January 14, 2026
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