Microsoft in China

So this past week and a half I have written about government intervention in the operations of Facebook in India and Egypt.  Now it looks like we have a trifecta with China’s regulators raising new questions about Microsoft’s business practices there.  Of course, we do not yet know what those questions may be, but I am sure that Bill Gates and company are not looking forward to being on the answering end.  Over the past several months Microsoft has appeared to have mounted a charm offensive, such as hosting a prominent meeting of Chinese and American tech leaders in Seattle in September.  During that meeting, Microsoft announced several partnerships including a cooperative effort with the China Electronics Technology Group (mostly in support of the Chinese military).

Interestingly, the PC maker Dell has now begun shipping more machines to China that come with a Chinese-made operating system, NeoKylin, installed on them.  Some experts have termed this Chinese strategy as “de-U.S.A” in an effort to dethrone Windows from PCs in China.  In 2004 Chinese officials with the State Administration for Industry and Commerce stormed four Microsoft offices in China, questioning executives, copying contracts and records, and downloading data from the company’s servers, including email and other internal communications.

Maybe this is all about how businesses operate in two very different economic systems, capitalism vs. communism.  No one can really be sure how this will all end, but clearly China is not ready to experiment with free enterprise, preferring to play by their own “rules?”

Ray Myers




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