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Microsoft: Indonesia Is Better Than China
Gordon G. Chang, 06.02.10, 02:25 PM EDT
Chinese intellectual piracy is driving out foreign business.
Last week Steve Ballmer said his company saw less potential in China than either in Indonesia or India. Why? The piracy of software. "There are two things that make a country interesting," said the Microsoft chief executive. "One is it buys a lot of PCs, the other is they pay for the software that gets used on those PCs."
Said Ballmer about China: "There is no software market to speak of."
Of course there isn't. According to one estimate, about 80% of the copies of Microsoft's ( MSFT - news - people ) Windows in China are pirated versions. And what is the figure for the company's Office software? That would be 95%.
The Chinese government, however, thinks it is doing a good job protecting the rights of owners of intellectual property. It has put in place more than a thousand measures to protect it, said Chen Rongkai of the Ministry of Commerce. And the country will continue to combat bootlegging. "China's effort at strengthening protection of intellectual property is universally recognized."
What is universally recognized is that the theft problem in China is getting worse. The value of pirated software was $7.58 billion in 2009, according to a report issued last month by the Business Software Alliance and market researcher IDC. That number was up $906 million from 2008 and almost double the 2005 figure of $3.88 billion.
We should not be surprised. Ian Bremmer, the head of risk consultants Eurasia Group, reports that these days foreign companies contend that "Beijing is no longer even pretending to observe international intellectual property rules." They point to the Chinese government's blatant grab of foreign technology by instituting the "indigenous innovation product accreditation" program, which, to obtain accreditation to sell to governments in China, requires the ownership of foreign technology and trademarks by local enterprises.
The initiative triggered protests from Asian, European and American business groups in China at the end of last year and has been the subject of intense discussions between Beijing and Washington, especially during last week's unproductive Strategic and Economic Dialogue in the Chinese capital.
Discussions with China over the protection of foreign business will remain unproductive. Simply stated, Beijing has a longstanding policy of using virtually any means to extract foreign technology.
http://www.forbes.com/2010/06/02/mi...-asia-opinions-columnists-gordon-g-chang.html
Microsoft: Indonesia Is Better Than China
Gordon G. Chang, 06.02.10, 02:25 PM EDT
Chinese intellectual piracy is driving out foreign business.
Last week Steve Ballmer said his company saw less potential in China than either in Indonesia or India. Why? The piracy of software. "There are two things that make a country interesting," said the Microsoft chief executive. "One is it buys a lot of PCs, the other is they pay for the software that gets used on those PCs."
Said Ballmer about China: "There is no software market to speak of."
Of course there isn't. According to one estimate, about 80% of the copies of Microsoft's ( MSFT - news - people ) Windows in China are pirated versions. And what is the figure for the company's Office software? That would be 95%.
The Chinese government, however, thinks it is doing a good job protecting the rights of owners of intellectual property. It has put in place more than a thousand measures to protect it, said Chen Rongkai of the Ministry of Commerce. And the country will continue to combat bootlegging. "China's effort at strengthening protection of intellectual property is universally recognized."
What is universally recognized is that the theft problem in China is getting worse. The value of pirated software was $7.58 billion in 2009, according to a report issued last month by the Business Software Alliance and market researcher IDC. That number was up $906 million from 2008 and almost double the 2005 figure of $3.88 billion.
We should not be surprised. Ian Bremmer, the head of risk consultants Eurasia Group, reports that these days foreign companies contend that "Beijing is no longer even pretending to observe international intellectual property rules." They point to the Chinese government's blatant grab of foreign technology by instituting the "indigenous innovation product accreditation" program, which, to obtain accreditation to sell to governments in China, requires the ownership of foreign technology and trademarks by local enterprises.
The initiative triggered protests from Asian, European and American business groups in China at the end of last year and has been the subject of intense discussions between Beijing and Washington, especially during last week's unproductive Strategic and Economic Dialogue in the Chinese capital.
Discussions with China over the protection of foreign business will remain unproductive. Simply stated, Beijing has a longstanding policy of using virtually any means to extract foreign technology.
http://www.forbes.com/2010/06/02/mi...-asia-opinions-columnists-gordon-g-chang.html
