Andrew White on 8 Jul 2000 19:57:25 -0000

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<nettime> Fearing Control by Microsoft , China Backs the Linux System

July 7, 2000
Fearing Control by Microsoft , China Backs the Linux System

SHANGHAI, July 6 -- Janet Reno is not the only one worried about Bill
Gates's software monopoly. China's leaders are, too.

 They are concerned that the country is growing overly dependent on the
Windows operating system, which controls computers running everything from
banks to President Jiang Zemin's e-mail box. But the Chinese government,
itself a master at monopoly, is taking its case against Microsoft not to
the courtroom but to the marketplace, albeit with a bit of administrative
fiat. It is backing the Linux operating system, which was created by a
Finnish university student in 1991 and is distributed free to anyone.

 "We don't want one company to monopolize the software market," said Chen
Chong, a deputy minister of information industries who oversees the
computer industry in China. With Linux, "we can control the security," he
added, so "we can control our own destiny."

 A growing number of Chinese have likened dependence on Microsoft to
leaving the keys to the country's increasingly computerized economy in the
hands of a potential enemy. Some warn that secret holes in Microsoft's
computer code might allow the United States access to Chinese networks or
even enable it, in time of war, to shut those networks down.

 Such concerns were only heightened last year when a cryptographer for a
Canadian software firm working in the United States said he had found a
feature in Windows called an NSAKey -- as in National Security Agency, the
United States government agency that gathers electronic signal intelligence
worldwide. Though Microsoft said the key was innocuous and no support has
been found for any sinister explanation, "no one can guarantee that Windows
does not have back doors," said Liu Bo, a former Microsoft executive who is
now chief executive of Red Flag, a government-backed company set up to
create software based on Linux and to encourage a homegrown software

 In addition, various arms of the government have been warning of the
security risk posed by the country's reliance on Microsoft. "Without
information security, there is no national security in politics, economics
and military affairs," declared an editorial in People's Liberation Army
Daily earlier this year.

 Microsoft calls such fears nonsense and says it continues to enjoy a
strong working relationship with the government. "We have shared product
information with them," said Michael Rawding, Microsoft's regional director
in China, "and I believe that their comfort with our product information
led them to allow the launch" of Windows 00, Microsoft's new
business-oriented operating system, in China last spring.

 Unlike the Windows source code, which Microsoft keeps secret, the Linux
code is open for all to see and is freely distributed with the stipulation
that anybody can improve it as long as any modifications are shared with
the rest of the world. The almost communistic "from each according to his
ability, to each according to his need" approach appeals to China's Marxist

 Despite the government's stand, no one is suggesting that Microsoft is
finished in China. Though it will not provide specific sales figures, the
company says its software sales in China surged 80 percent last year and
continue to grow. But the government's move to diversify reflects a broader
dissatisfaction with the company and its founder, Mr. Gates, who just a few
years ago was hailed as a hero by China's young technology enthusiasts.

 The turning point in Microsoft's image was the introduction of its
Chinese-language Windows 95 operating system, which was programmed to
display references to "Communist bandits" and to exhort users to "take back
the mainland." Beijing, infuriated to learn that Microsoft had used
computer programmers in Taiwan to write the software, demanded that the
company hire mainland programmers to fix it.

 Chief among the company's critics is its former general manager for China,
Juliet Wu, who has become a national celebrity with her withering,
best-selling expos&#0233;, "Up Against the Wind: Microsoft, I.B.M. and Me."
The picture she paints of Microsoft as an arrogant Goliath feeds into the
irritation many Chinese computer users feel toward the company.

 Ms. Wu and other critics say Microsoft's pricing -- a software program can
cost as much as an average office worker's monthly salary -- forces users
to buy pirated copies of the company's software. (The Business Software
Alliance, a nonprofit trade group, estimates that as much as 95 percent of
all software in China is pirated, though the industry hopes China's
expected admission to the World Trade Organization will change that.)

 Liu Dongli, an Internet entrepreneur in the southern province of Fujian,
was so enraged by having to pay $241 for Windows 98 that he sued the
company for unfair pricing. The suit was withdrawn when Mr. Liu realized
that Microsoft charges no more for its products in China than it does
elsewhere. "But that doesn't mean we lost the case," he fumed, vowing to
bring suit again when he has more evidence. "Monopoly is not a good thing."

 The news media, meanwhile, have criticized Microsoft for suing a company
last year over the sale of pirated software. Microsoft, which was asking
for $0,000 in damages, lost the case because the Chinese court ruled that
it had sued the wrong company. The defeat only darkened Microsoft's ominous
silhouette in the eyes of many Chinese.

 "Microsoft is a bully," said Hua Yuqing, a young Internet entrepreneur,
who complains that Microsoft's high prices and proprietary computer code
squelch creativity. He is building a business creating software programs
that run on Linux. "I don't want to feel that I'm subconsciously
controlled," Mr. Hua said, referring to the dependence on Microsoft that
comes with using its products.

 Mr. Hua and a half-dozen computer programmers peck away at their keyboards
here in a drab office empty except for computers, desks, chairs and a shelf
stocked with bottles of orange soda and boxes of chocolate milk. He and his
colleagues are using Linux to start a company that provides services to
subscribers over the Internet -- in this case, the use of accounting
software and sales-tracking software. The software stays on Mr. Hua's
server computer, and customers rent it rather than buy their own.

 Microsoft's public relations disaster has been a boon for Linux. So far,
several companies -- including Red Flag, which is backed by President
Jiang's son, Jiang Mianhang, and TurboLinux, based in San Francisco -- have
introduced Chinese-language versions of the Linux operating system in
China. Many other companies have started to provide software and services
for China's Linux users.

 The Chinese government tried for more than a decade to develop an
operating system of its own, but was unable to keep up with the
fast-changing industry. Linux gives the country the tools to build that
system now -- and, in the Chinese view, the fact that the Linux code is not
privately held assures that any security it wants to build into its
computer systems will not have undetectable vulnerabilities.

 But even Linux enthusiasts profess ambivalence about the government's
interest. Linux developers in China say some overseas colleagues worry that
China may not play by the rules for collaborating and sharing and may adapt
Linux to create a proprietary system instead.

 In any case, China represents a market potential of such size, and
government influence over the market is still so strong, that Beijing's
support can turn almost any product into an industry standard domestically.
By the end of next year, the country may well be the third-largest PC
market in the world, and software sales are expected to grow more than 30
percent a year for the foreseeable future.

 As China's economy becomes increasingly integrated with that of the region
and the world, much of Asia is likely to follow its lead.

 Mr. Liu, the chief executive of Red Flag, says a third of the country's
Internet servers -- the computers that power Web sites -- are already using
Linux operating systems. He estimates that by the end of next year Linux
will run half of all servers in China and as much as a third of the
country's desktop computers.

 Those estimates may be overblown; the technology research firm IDC
Asia-Pacific says its data shows less than 3 percent of all servers shipped
to China last year were loaded with Linux. But IDC expects the number to
more than double this year, and Linux's real market share is most certainly
higher because the operating system can be downloaded free from the

 "Linux, without doubt, has gained some headway among software developers
in China," Mr. Rawding said. "However, I have yet to see any
mission-critical organization deploy Linux because the truth of the matter
is that in businesses, you want the support and service to be available to
you instantly when something does go wrong."

 Nonetheless, Great Wall Computer, one of China's biggest PC makers, has
already shipped 0,000 desktop computers loaded with the Linux operating
system, which looks much like Windows though it cannot yet match all of
Microsoft's features.

 Ma Li, marketing chief at Great Wall, says his company shifted toward
Linux at Beijing's urging. "As a leading enterprise," he said, "we should
respond to the call of the government."

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