Chinese PC Makers to Ship Legal OSs

New agreements between Microsoft and Chinese computer manufacturers, a government requirement that Chinese computer manufacturers preinstall legal OSs, and high-level meetings between Microsoft and the Chinese government point to a shift in China’s attitude toward software piracy. The changes, prompted both by pressure from the West and by concerns that the country’s 90% piracy rate will cripple the domestic Chinese software industry, could provide some significant benefits for Microsoft, although the company is unlikely to enjoy in China the dominance that it has elsewhere, as China continues to encourage use of open-source software.

Political Pressure for Legality

Widespread piracy and counterfeiting, of not only software, but of movies, music, and consumer goods such as watches and handbags, has been a major irritant between China and other nations, and the country agreed to crack down on piracy as a condition for entering the World Trade Organization (WTO) in 2001.

However, software piracy remains a serious problem. According to the Business Software Association (BSA), which publishes an annual report on world software piracy, China had the world’s third-worst piracy rate in 2004, at 90%, compared with a U.S. piracy rate of 21%, the lowest in the world.