April 19, 2006
China Software is Still a Pirate’s Game
BEIJING -- "DVDs? CDs? Games? Porn? What you want?" hawkers in Beijing's Zhongguancun neighborhood whisper to potential customers.
Asked for computer software, one scurries off to check his cache, kept behind a nearby shed, and five minutes later holds out a Chinese version of Windows XP Professional for 30 yuan ($3.74) - 25 after some friendly haggling.A legitimate copy sells for about 2,000 yuan ($249.6).
"Come with me. There's more," says Li Fuzhen, who has sold bootleg films, music, software and computer games in this district called China's "silicon valley" for three years.
And there was much more. Despite periodic crackdowns on piracy, China's has a voracious appetite for cheap, unauthorized copies of software and other digital products.
President Bush has said the issue is a sore point in trade relations that he will raise when Chinese President Hu Jintao visits Washington on Thursday. U.S. officials say up to 90 percent of software used in China is unlicensed.
In Seattle on Tuesday, at the start of a four-day visit to the United States, Hu met Bill Gates, the Chairman of Microsoft Corp., the software giant whose sales in China have been sapped by widespread piracy.
A Chinese official in Beijing said Hu asked Gates to trust the Chinese government's efforts against piracy.
"My understanding of President Hu Jintao's dialogue with Bill Gates ... is that it sent the signal that the Chinese government wants foreign investors and businesses to have confidence in China's intellectual property protections," Wang Ziqiang, the spokesman for the State Copyright Bureau, told a news conference.
China has rooted pirate software out of all government offices: the cost for that task in central government offices alone was about 150 million yuan ($17.47 million), Wang said.
Beijing promised Washington that step last year, and Wang said China was now working to expand the scheme to other state-owned companies.
Earlier this month, China ordered domestic computer makers to install authorized operating software before their goods leave the factory gates.
But a stroll around Zhongguancun's warrens of computer shops and stalls suggested China is far from weaning locals off bootleg software that -- while sometimes unreliable -- sells for one or two percent the cost of much legitimate software.
One stall holder at the Zhonghai Computer Store near Peking University showed a two-page list of Chinese- and English-language software, including Microsoft Excel, Adobe Photoshop and heavy-duty CAD industrial design programs.
Li, the hawker, said police raids and arrests of bootleggers have increased since last year, and the trade has receded from open street corners to rooms and huts watched by other hawkers.
Originally a farmer from central China's Henan province, Li said he was briefly arrested for selling bootleg pornography last year.
But other jobs are hard to find, and there is still a steady income from cut-price software, even with police raids to worry about, he said. He also offers fake identity cards and university degrees.
Li said he did not worry about the effects of Chinese software piracy on Bill Gates' company. "Bill Gates has retired, so it's not going to hurt him anyway," he said. "Chinese people are too poor to think about those things."