Microsoft has closed at least 15 offices and joint ventures in China over the past 5 years, laid off 200-400 Azure staff in China, and is relocating server/Surface/Xbox manufacturing out of the country, aiming for 80% production outside China. This reflects Beijing's shift toward Chinese software (Kingsoft, Kimi AI) in government procurement policies since 2017, though Microsoft's China revenue remains modest at ~1.5% and the company maintains research operations in Beijing.