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Microsoft in China Is Not a "Hegemony of Knowledge," Editorial
07/07/1999
China Online
Copyright (C) 1999 China Online; Source: World Reporter (TM)
Some have denounced Microsoft in China as a "hegemony of knowledge," often citing the high prices of Microsoft's software in that country. An article by Zhang Xun in the June 29 Zhongguo Jingying Bao (China Business) asks the question, "Do high prices make Microsoft guilty?"
The price of the Chinese version of Microsoft software is higher than on the international market, Zhang said. But the difference is not unreasonably great, especially considering Microsoft's input in developing the Chinese language versions of its products. The fact that domestic Chinese software is lower than the English version, and knowing the tax situation in China, the price difference is acceptable, Zhang said.
Christian Dior lipstick, Pierre Cardin clothes, BMW cars and IBM ThinkPads are all sold at a higher prices in China than in other countries, and far beyond the reach of ordinary consumers, Zhang argued. While these famous brands have not come close to Microsoft's localizing efforts, Chinese never complain about their high prices. Instead, most consumers in China are proud to buy these products, he said.
Zhang asked: Why has Microsoft received such special attention? Is it because the Chinese can no longer get software at zero cost, and they become angry from embarrassment when they are asked to pay for Microsoft products which were formerly free?
And how many people would buy the products even if Microsoft cut its prices? Jinshan Company's WPS2000, a domestically produced word processing software, is much cheaper than MS Word, and it has superior capabilities, he said. But has Jinshan made much profit? The "orthodox" WPS2000 is priced around RMB900 (US$109), according to Zhang. However, pirated copies of MS Office are either free or around the cost of a lunch box. It is clear which the consumer would prefer, he said.
The high price of Microsoft's Chinese software, therefore, should not be evidence of hegemony, Zhang concludes. As a matter of fact, because Microsoft's sales in China have remained sluggish for years, its management in China has no other alternative but take actions to crack down upon piracy to protect its interests and rights, he said. The charge of hegemony is groundless.
Another frequently mentioned "proof" of Microsoft's hegemony is "the monopoly of its operating system," which has forced Chinese hardware makers to spend more and more money to buy the Windows operating system, while they make less and less profit, he said.
According to Zhang, China is under the control of many for core technologies - not just Microsoft. For many years, China's television manufacturers were under the control of Japanese remote-control circuits, China's refrigerators under the control of imported compressors, and China's video compact disk players under the control of C-CUBE and Philips chips, he said.
But Chinese say nothing about "Matsushita hegemony" or "Philips hegemony." In the final analysis, the fact that China is under the control of others in core technologies is not hegemony, but a consequence of China's positioning at the end of the product value chain, Zhang said.
Microsoft has continued to shift production to China, to establish solely-owned companies in China, to advocate intellectual property, to establish research institutes, and to train local managers and technical personnel. Regardless of its purpose, these actions are beneficial to China, Zhang said.
The real enemy of Jinshan, the Chinese IT company, is not Microsoft but software pirates, at least for the time being, he said. The barrier that hinders the development of China's software industry is not the so-called "hegemony of knowledge," but China's own backward technology and sluggish information product market.
The Chinese IT industry's current slump is not due to low demand, but a result of indifference to intellectual property and weak law enforcement, Zhang said. To correct the situation, China must protect the legal rights of all software publishers including Microsoft and Jinshan by accelerating technical progress and promoting the knowledge economy throughout China, he said.
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