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This is a Linux distro, not "their own OS". Many countries all over the world have had government-subsidized Linux distro projects, at national, state and city government levels. It's something that happens pretty quickly whenever and whereever a large deployment happens (e.g. LiMux).

For that matter, many a CS faculty at many a university have actually created their own OS. Nothing too sensational either.

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Pedantry aside, it is the reasoning behind building their own OS distro that is relevant here:

> In 2009, a report presented to the US-China Economic and Security Review Commission stated that the purpose of Kylin is to make Chinese computers impenetrable to competing countries in the cyberwarfare arena. The Washington Post reported that:

> China has developed more secure operating software for its tens of millions of computers and is already installing it on government and military systems, hoping to make Beijing’s networks impenetrable to U.S. military and intelligence agencies.

Sounds perfectly sensible, rather than "paranoid".

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