China in vow over foreign software

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Last updated at: (Beijing Time) Monday, February 09, 2004

China in vow over foreign software

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China's government has promised to give equal treatment to foreign and domestic companies when buying software, a pledge likely to ease concerns among international vendors that it would require officials to favour home-grown products.

A report in China Daily newspaper said regulations on government software procurement are to be issued soon and these will not differentiate between local and foreign companies.

"Software firms invested by foreign companies will enjoy equal opportunities from government procurement," Gou Zhongwen, vice-minister for Information Industry, was quoted as saying.

Foreign trade officials and industry executives said last year Beijing was considering issuing rules requiring government departments to earmark spending for domestically produced software products, a policy aimed at promoting the local sector's development.

However, the newspaper quoted government officials and industry executives as saying the development of the software industry would be best achieved through "further opening and more co-operation with foreign firms". While China is not yet a big software end-market, with government spending low and piracy rampant, the country's huge population and rapid economic growth add to its strategic importance.

The fat margins commanded by US software giant Microsoft have angered Chinese officials, who are keen to promote potential alternatives such as local operating systems based on open-source Linux software.

However, foreign companies' market share has actually been raised by the prevalence of cheap pirated copies of their software, which has helped to undermine demand for local rivals's products. Microsoft's operating system and Office suite have become the de facto standards even though few copies are paid for.

Source: agencies

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