Software, communications, wireless networks, life sciences — the state has a lot to offer China in these areas. Not the least of which...
Software, communications, wireless networks, life sciences — the state has a lot to offer China in these areas. Not the least of which is Microsoft Windows, which dominates the PC market there.
However, because copying is so easy, theft is a massive problem. Last year, more than 90 percent of software in China was pirated, says Robert Holleyman, president of the Business Software Alliance.
While that’s down from 92 percent the year before, it still cost companies around the world $3.6 billion in lost sales last year, down from $3.8 billion in 2003.
The figure is an estimate, because software sales, like services, are difficult to tally. But the gap is easily visible, Holleyman says.
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“China is the second-largest market in the world for PCs behind the U.S., but it is only the 25th-largest market for PC software,” he said.
Across a range of industries — software to manufacturing to design — intellectual-property protection is probably the biggest point of business contention between the U.S. and China, says Joe Borich, executive director of the Washington State China Relations Council.
“China is saying they’re doing everything they can, and the U.S. says ‘hogwash,’ ” he said. “Pirating of IP is rampant in China.”
In July, China agreed that all government offices will use legal software by year end, and that state-owned enterprises will follow by 2006. But Holleyman says the proof will be if the government allocates money to buy the software.
“They need to make the money available so they can buy the software,” he said.
He’s also looking for President Hu to reinforce that commitment during his visit.
And doing so would be a quick way to help address the U.S. trade deficit with China.
“It won’t eliminate the trade deficit,” he said. “But software purchases are one of the fastest means to reduce it because it’s easily deployed. It’s not a long-term manufacturing process.”