Microsoft Windows has long enjoyed dominance in the desktop operating system market in China — and Beijing has long wanted that to change. 

Now after years of attempting to develop an alternative, the Chinese government is shifting tack. Its latest effort to come up with a viable indigenous rival to Windows — announced officially in June and known as the openKylin project — is looking to draw on expertise from a so-called “root community” of both state and non-state backed companies, individual developers, and research institutions.

By encouraging an open-source development approach for the Kylin operating system and soliciting help from a wide range of participants, the Chinese authorities are hoping to improve their homegrown product, and to foster the sort of ecosystem around it that makes Windows such an attractive and essential system for companies and individuals around the world. 

The idea of eventually replacing Windows in China also dovetails with Beijing’s broader aims to establish greater technological independence and resilience, in areas ranging from semiconductors to social media and mobile phones. A particular concern for China’s government is that Windows’ prevalence opens the country up to national security threats — mirroring Western countries’ worries about over-reliance on Chinese firm Huawei for their telecoms infrastructure.

Yet edging out Windows, which has an 85 percent market share in desktop operating systems in China, remains a formidable challenge — and one that China’s private companies have long avoided even attempting. Experts say that lack of interest could yet dampen the openKylin project’s chances of success. 

“The private sector might recognize that it’s a total waste of time and not be interested,” says Scott Kennedy, a senior advisor at the Center for Strategic and International Studies in Washington. “Not only do they likely think that others wouldn’t want to shift but they themselves don’t want to shift away from Windows.” 

Even for leading Chinese tech firms like Huawei — which has achieved major success developing its own mobile operating system, Harmony — creating a desktop operating system to rival Windows is a different order of challenge.

“The bigger desktop and server enterprise operating system segment is much more complicated and difficult to break into because it has so many more functions and is being used in mission critical applications,” says Paul Triolo, a senior vice president for China at Albright Stonebridge Group, a consulting firm.

Microsoft’s success in China stems from its long presence in the country, dating back to the early years of its economic reform and opening up period. The company — which did not respond to requests for comment — first entered China in 1992 and has experienced relative stability since, even as other U.S. tech giants like Google and Amazon struggled. 

“It was generally the most stable of the tech companies primarily because Microsoft didn’t deal in content for the most part,” says Matt Sheehan, a fellow at the Carnegie Endowment for International Peace in Washington. “If you deal in hardware or systems that seem to be less value embedded, then you have an easier time.” 

Despite the widespread adoption of Windows, Microsoft has struggled to make much profit in China due to high rates of piracy, analysts say. In January 2020, Microsoft President Brad Smith said that China accounts for less than 2 percent of its global revenue.

Moreover, Beijing has long tried to reduce Windows’ pervasiveness, especially in official circles. As early as 2000, the Chinese government tried to prohibit the use of Windows in government ministries and replace it with now-defunct Red Flag Linux developed in China. In 2008, Beijing barred the use of Windows 8 on government computers and in 2016, Microsoft opened a “Beijing Transparency Center” that enabled Chinese government officials to analyze Microsoft code and products in a secure facility to temper security concerns raised by the Chinese government. In May, Bloomberg reported that all government agencies would be prevented from using foreign computers or operating systems in two years.

Beijing’s sense of urgency was heightened after the disclosures of Edward Snowden in 2013. The evidence revealed of American and European surveillance breaches in consumer technology demonstrated that Western intelligence agencies could have access into Windows, presenting a national security concern for the Chinese. 

“They are anxious that Windows has a backdoor that allows governments or other intruders to spy on China, the government, and its companies. They want to close that door,” says CSIS’s Kennedy.

Besides such threats, the Chinese government may also be focused on finding a domestic alternative to Windows because of worries over further technological decoupling, following U.S. actions such as its ban on Huawei and Google’s revoking of Huawei’s Android OS license. 

“China is anticipating at some point in the future that the conflict between China and the United States will come to a breakpoint and that they will need to be ready to have a functional operating system [of its own] for that moment,” says Min Jiang a professor at the University of North Carolina at Charlotte who studies Chinese cyber policy. 

If we had this conversation 20 years ago, people would laugh at the very idea of China becoming a technological powerhouse. But it only took 20 years to build an ecosystem that can really compete against Silicon Valley.

Min Jiang, a UNC professor focused on Chinese cyber policy

The openKylin initiative does have significant backing, with more than two dozen tech companies, research institutions, and universities already involved, including China’s Advanced Operating System Innovation Center and ZTE subsidiary Zhongxing Newstart Technology Company. 

The project was developed by KylinSoft, a software company born out of the People’s Liberation Army and a subsidiary of state-owned China Electronics Corporation (CEC) — a company that is prohibited from U.S. investment due to its ties to the Chinese military-industrial complex. Kylinsoft has long been involved in efforts to develop a Chinese alternative to Windows, having first established the Kylin operating system in 2001. OpenKylin has now identified 11 key areas where it is actively seeking support from developers, ranging from security to the base, or kernel, of Kylin. 

Yet experts warn that it will take more than getting the operating system itself right. The widespread global adoption of Windows has incentivized developers to build on its software over the years, creating an integrated ecosystem of applications that have made personal, commercial, and government operations more straightforward. 

“Windows started in the 1980s and it took them two or three decades to get where they are today in terms of the number of developers and the applications in their operating system environment,” says Nina Xiang, co-founder of China Money Network, a data platform tracking Chinese tech innovation. 

Another important obstacle for widespread adoption of a Kylin OS is the network effects involved. Introducing an alternative operating system requires developers to rewrite software to make other applications compatible with the new system, a costly and time-consuming process.

Set against such challenges, however, is optimism in some quarters borne of China’s success in other areas of technology in recent years.

“If we had this conversation 20 years ago, people would laugh at the very idea of China becoming a technological powerhouse,” says UNC’s Jiang. “But it only took 20 years to build an ecosystem that can really compete against Silicon Valley.” 

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