Microsoft opens the gates: patents, piracy, and political challenges inChina 1)
Microsoft has faced significant challenges, such as the widespread piracy of its products,Chinese government to transfer its technology, host government promotion of competitorproducts, discriminatory procurement practices by subnational authorities in China, andstrong encouragement to enter into joint ventures with local firms. The risk of piracy hasbeen diminishing as China joined the World Trade Organisation and committed itself tohonour the IPR. Software piracy rate was 92 percent in 2004 and fell to 86 percent the nextyear and 82 percent in 2002. The piracy rate is not only unique in China; actually it is inevery country even it still occurs in developed countries.2)
Microsoft had some approaches to manage its political risks in China such as Bill Gate visitedChina to launch Chinese Windows. Even though following a frosty by Chinese elites, Gate didan about face and pursued a more cooperative relationship with Beijing. Microsoft cheeredefforts by the Office of the U.S Trade Representative to obtain new IPR enforcementcommitments from the Chinese government. Microsoft lobbied vigorously in 2000 for China’s WTO accession. Microsoft signed agreements with four leading Chinese computer markets: Legend, TCL, Tsinghua Tongfang, and Great Wall, to preinstall Windows XP on theirmachine. As well, it signed an accord with the Shanghai regional support centre into a globalsupport centre, and trains thousands of software architects. Also, it became the first foreignfirm to become a member of the Chinese Software Industry Association. Microsoft signed a three year $750 million deal with China’s State Development & Planning Commission . Fewyears later, Microsoft agreed to let the Chinese Government see the source code for theWindows operating system and all Office 2003 products. In 2005, Microsoft MSNannounced a partnership with Shanghai Alliance Investment Ltd. To launch the...
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