Effects of China's Software Policy on World Economy? 588
guptaparesh asks: "The Chinese government is currently engaged in a comprehensive overhaul of its procurement policies and regulations. These regulations would ban non-Chinese firms from selling software to the Chinese government. Given that how much trade all the countries in the world are engaged in with China, isn't this a unfair trade move by the Chinese government?" A better question would be how this might affect the worldwide economy, particularly that of the U.S. and China. What benefits and drawbacks may China see as a result of this new policy? What steps might the U.S. take to attempt to counter it?
Great for big companies, sucks for small ones (Score:4, Informative)
No problem for guys the size of IBM, who can simply create bizzare chimeras with guys like Lenovo to produce things that are Chinese and US companies at the same time.
Re:Great for big companies, sucks for small ones (Score:2, Insightful)
Re:Great for big companies, sucks for small ones (Score:3, Interesting)
The more I think about these new regulations, the less offensive I find them to be(not that I really took much offense to them in the first place).
Re:Great for big companies, sucks for small ones (Score:2)
I would guess... (Score:2)
I would think that this would hurt Microsoft. That fact alone make me support it. :) However; Everything over in China seems to be pirated so I fail to see how this makes a difference.
Re:I would guess... (Score:2, Insightful)
Comment removed (Score:5, Interesting)
Re:I would guess... (Score:3, Funny)
Re:I would guess cluelessly (Score:3, Insightful)
Years ago Microsoft has given the Chinese government access to the complete source code of Windows operating systems.
And the Chinese are not the only government who has access to the Windows source code.
And you have the nerve to call the grandparent "clueless?"
Ignoring the whole NSAKey fracas from a few years back (that would be too easy) exactly why do you think Microsoft has given China--or anyone else, for the matter--the "complete" source code to Windows? My understanding is th
How the U.S. can counter it? (Score:5, Funny)
Simple, the U.S. government should refuse to buy software from Chinese companies.
(I pity anyone that mods this insightful)
Re:How the U.S. can counter it? (Score:2)
Re:How the U.S. can counter it? (Score:2, Funny)
Re:How the U.S. can counter it? (Score:2)
It's been so long since anyone cared what I think.
Let me state the obvious (Score:2)
Re:How the U.S. can counter it? (Score:2)
We can benefit from all the GPL software written as much as the Chinese.
The only ones to complain would be those that dont want to participate in FOSS.
Cheers
Re:GPL enforcement in China??? (Score:3, Insightful)
Re:How the U.S. can counter it? (Score:5, Insightful)
Many US government agencies do not use Checkpoint firewalls, solely because it's made by a company in Isreal.
China has a much more paranoid outlook. Good for them.
For starters (Score:5, Funny)
Re:For starters (Score:5, Funny)
As if they didn't have enough human rights issues...
Re:For starters (Score:3, Interesting)
One way of adopting Linux (Score:2)
how does it feel? (Score:2, Insightful)
Re:how does it feel? (Score:2)
Re:how does it feel? (Score:5, Insightful)
Thank god, indeed. [asianamericans.com]
The US has quite a few flaws, but think long and hard on the above before you break out the champagne to celebrate Chinese dominance.
Re:how does it feel? (Score:5, Insightful)
> before you break out the champagne to celebrate Chinese dominance.
Yea, but at the rate we are going down the ol shitter the fall of US world dominance is a forgone conclusion in another generation. So all we can hope is that we manage to export Western Civilization to places like China & India before we collapse. Because we certainly haven't had a use for it here the last 50 years and Europe no longer even remembers having had it.
How is that determined? (Score:5, Insightful)
So whats to stop US companies from opening 'chinese' companies?
Re:How is that determined? (Score:2)
Let's read the article, yep they can do it. (Score:4, Insightful)
They can and will, but the Honorable Tom Davis says:
In a lawless land, the law is not much of a problem. The first one is easy to get around by selling to a vendor. The second one stops you cold, until you remember that China is as corrupt as all hell. Those with power will continue to do exactly as they please.
They could and should, of course, do completely without US commercial software. There are more than enough free software alternatives which can be "developed" by recompile in China. A totalitarian state ironically can have much better control of their IT if they are the root user of their own free software. No government, including the US government, should tolerate a third party owning their IT infrastructure the way US commercial software vendors demand.
How will this change the world economy? Not at all! The whole "engagement" deal Bill Clinton came up with was a pipe dream. China's leaders have made themselves rich of US and European trade by making slaves of their own people. Leaders who screw their own people like that will surely screw everyone else if they can. There are no surprises here, except to those dumb and immoral enough to do business with and invest in communist China.
Re:Let's read the article, yep they can do it. (Score:3, Insightful)
That's right! Kick the US right out of the WTO. Oh wait we're not talking about the US? My mistake.
Re:How is that determined? (Score:3, Funny)
China (Score:4, Funny)
"a unfair trade move..." (Score:2, Insightful)
Uh, none? It isn't any of the U.S.'s business... literally!
This reminds me to a case. (Score:2)
Re:"a unfair trade move..." (Score:3)
It *is* their business if it concerns them.
Chinese Goverment (Score:2, Insightful)
Re:Chinese Goverment (Score:2)
Apart from that, am I the only one that's a bit uneasy about this - especially considering the fact that China is where a lot of companies are starting to outsource now instead of India?
Depends on the details (Score:5, Insightful)
In practice, how bad this is depends on the details. Specifically, can a business get away with just having a Chinese subsidiary? And if that subsidiary can be in Hong Kong, many companies are already positioned to meet this requirement.
Reasons all govs should do this (Score:4, Insightful)
By requiring that the companies you do business with be in your own jurisdiction, you are essentially keeping the money "in house" and keeping the jobs "in house" as well. The state of Indiana recently (last eyar or so) had a bill for this (not sure if it got passed or not). What it essentially does is increase the jobs and keep all money in state. For a federal governent to do it, it keeps the money in the country.
Makes perfect sense for a variety of reasons to do this.
Re:Depends on the details (Score:5, Insightful)
This is just a government spending policy. Is there really anything wrong with a government electing to support its own economy and keep the tax money it collects and spends within its borders? No. As a matter of fact, most would consider it the responsible way for a government to behave.
Re:Depends on the details (Score:2)
This isn't really protectionism. It would have been if the chinese government had imposed high taxes on the import of software.
The chinese government has decided that they do not want to buy imported software. This decision imposes no restrictions on any other chinese companies.
The chinese government is a software customer. As a customer they have the right to decide where they want to purchase their software.
Retaliatory Protectionism is Even Worse (Score:4, Insightful)
Unfortunately, the Bush Administration are the latter type of Republicans. (I'm not saying the Democrats are any better - they just have different friends and different special interests. The last good Republican President we had was Bill Clinton, and before him, well, we didn't elect Goldwater
So the Bush Administration may do something protectionist as retaliation, damaging more American businesses, or they may just give a bunch of speeches and not actually do anything. If we're lucky it'll be the latter.
Meanwhile, China's government have been pretty crazy, trying to pretend that they're preserving the benefits of Communist central planning and limited amounts of political repression while becoming corrupt capitalists in practice - but they're mostly Not Stupid about where the money's coming from. So yes, big foreign businesses will be able to set up Chinese subsidiaries or joint ventures to sell to the government as long as somebody's nephew or brother-in-law gets to run them. And small foreign businesses will be able to sell to Chinese wholesalers, or maybe sell their products as OEM to Chinese companies that will add value by localization.
Microsoft and Oracle probably already have Chinese "partners", or else they'll set them up, and there are Linux distributions developed in China, and possibly other Linux commercial distributors can get Chinese companies to do documentation and packaging for them.
non-issue (Score:4, Insightful)
No. They are just creating a policy for how government buys software. They aren't disallowing any Chinese businesses or people from buying US or other software. I can't see how this affects the economy at all. The Chinese government big enough.
Unilateral Favoritism (Score:2)
Re:Unilateral Favoritism (Score:2)
You don't want to pay your own citizens decent wages, so you export manufacture to China where chinese can make your childrens toys in sweat shops. They are doing you a favor by producing things under slavelike conditions.
Re:Unilateral Favoritism (Score:3, Insightful)
Most of those laid off get new jobs at reduced wages. The middle class will consume as they are told no matter what their income is. So long as they do, the outsourcing game of
A suggestion (Score:5, Funny)
How about a ban by the Chinese government on Chinese firms selling non-Chinese software to all the countries in the world?
what if .... (Score:3, Insightful)
How many s/ws manifactured by US firms have true internationalization support ?
Besides the ban would be only for selling s/w to the Govt, not the 1.3+ Billion consumers.
Re:what if .... (Score:2)
As it stands today (Score:2)
My guess is that it'll balance out due to quality and services. With software in businesses bei
What steps might the U.S. take? (Score:3, Insightful)
Re:What steps might the U.S. take? (Score:2, Interesting)
What's wrong with... (Score:2, Insightful)
unfair trade (Score:2, Flamebait)
I thought that was the definition of the "free trade" euphemism, where only the U.S. is allowed to be a hypocrite.
Made in china (Score:2)
coffee mug - made in China
shoes - made in China
clothes - made in China
wall clocks - made in China
crockery - made in China
and now -- click that about box
MADE IN CHINA
Piracy (Score:2)
Effects of China's Software Piracy on World Economy?
trade (Score:2)
stop trade.
at an import fee for software products
the usual. OTOH, do you think MS is oging to not make a move against it?
Seems to me that open source (Score:2)
Chinese policy? (Score:2)
It's not quite the same as excluding foreign companies from supplying the Chinese Government, but pretty close nevertheless.
Multinationals might be able to get around it, if they establish development centers in China and are creative with IP rights.
Good for their national security. (Score:3, Interesting)
China (Score:5, Interesting)
This is exactly the same as every other country (look who gets all the contracts in Iraq for example), the only "real" difference is we all know "china is evil" and America/Europe/Whatever you like near the Atlantic is "good" and "helping the industry".
So China's doing nothing different from anyone else. If anything being "shut in" may even help Linux if Microsoft piss off the wrong government member.
Re:China (Score:5, Insightful)
What's funny is that from a class perspective, China's policy is more likely to help the little guy than the US's policy, so if anything, we should encourage China to foster their own industry. The greater the pool of software companies, the more of a demand there will be for labor, which should drive salaries up. This is why workers should encourage governments to help foster new players in industry.
If you make less than $500,000 a year, the last thing you should want is for governments to completely open their markets. The complete opening of markets will result in the eventual consolidation of worldwide industry, with predictable consequence of low wages, no benefits, and poor quality products. Keeping some barriers between large markets can be a good thing.
Sure. (Score:2)
Yeah, it's not fair. But they have their reasons, which of course include a bit of justifiable paranoia and a desire to bootstrap a domestic software industry. There are a lot of smart people in China (just like in India), and they can't all work injecting molding plastic for the US toy market.
In the end, though, it's the private sector that is going to matter in
Dont worry, China's economy is toast.... (Score:2)
.... Walmart is opening [chinadaily.com.cn] stores there. Thus, it's only a matter of time.
Is China doing the right thing? (Score:2)
Protectionism and proprietary software (Score:2)
My first reaction was to cry "Protecionism!". After thinking about it a little, I see another angle. The Chinese government is taking a prudent step to protect itself from software it doesn't control.
If Microsoft, or Mandriva, or some Canadian firm sold the Chinese some warez and attached a spyware applet, stealing vital Chinese national secrets, what could they do about it?
If it's a Chinese firm, I'll leave to your imagination the kinds of things they could do.
Another twist is that if a Chinese
Drop in the ocean (Score:2)
Who cares (Score:2)
The usual solution (Score:2)
So... (Score:3)
China's control of US-China trade issues (Score:3, Interesting)
But with the trade deficit with China and budget deficit being funded by China, China is the one who holds the best cards in the coming tradewar that recent headlines hint at.
If China stops buying US bonds, or floods the market with what they already own, the US economy is screwed.
I think it is kinda funny that John Snow is making demands to China after getting so many loans from the Bank of China.
If I am going to bring legal action against someone, I am not going to go borrow money from them first - especially if I can't pay it back.
Re:China's control of US-China trade issues (Score:3, Interesting)
If I am going to bring legal action against someone, I am not going to go borrow money from them first - especially if I can't pay it back.
I take it you've never heard the expression, "If you owe the bank a grand, its your problem, if you owe the bank ten million, its the bank's problem"?
The amount of money the US owes China is less an expression of need for a loan as it is a display of contempt for their ability to ever claim it back.
Now I know there are a lot of people who have watched too man
Re:China's control of US-China trade issues (Score:4, Insightful)
Are you suggesting that the US can just not pay it back and not have it affect the US economy?
The amount of money the US owes China is less an expression of need for a loan as it is a display of contempt for their ability to ever claim it back.
1) The US does need the loan at its current spending and trade deficit. Maybe they can get it from other usual places like Saudi Arabia and Japan, but we all know that they can't just print more money? (right?)
2) The US is not immune to the kind credit problems that causes mass economic and currency flux to bounce around between Asia, Russia, Mexico, etc.
The Chinese that I know, and there are many, I even speak a good deal of Cantonese, are so completely and utterly brainwashed by their upbringing that they will accept no criticism of their country, nor any discussion.
This could be said about a lot of countries, US included.
The US goverment already does this... (Score:5, Informative)
This articles prevents the Chinese Government from buying software from outside of the country. There's still another 1.3 billion consumers there that don't directly work for the government. I don't see this to be a very big problem for US companies trying to sell products there.
Re:The US goverment already does this... (Score:3, Informative)
U.S. public sold a bill of goods (Score:4, Interesting)
As more and more manufacturing jobs, and lower end service jobs (New York City parking tickets processed in India?!) have moved abroad, the continued argument, particularly from those fostering and benefiting from the outsourcing, has been that the U.S. will become *the* place for high tech, high value jobs. We'll "lead the world" in this regard, or some such.
What was obvious to some is now becoming apparent in the general media. There's nothing special about these "high end" jobs that requires they be done here. Nothing other than our legal system and established tradition of rights and responsibilities particularly with regard to contract law.
As other societies advance, there's no reason for them to hire our services, at our significantly higher cost, when they have native talent or talent accessible in other countries that is equally well educated and equally capable.
Other societies have been busy building up that talent, and they are attempting to address the legal concerns. We're getting closer to the tipping point, where the U.S. becomes largely obsolete.
Largely obsolete, except for a lot of warships, planes, and nuclear warheads. Beware: That way lies overt fascism.
Do nothing! (Score:3, Interesting)
How should we counter it? Do nothing! No, really. Think about this. What it means is that China is limiting the population of people who can supply stuff to their government. When supply goes down, the price goes up. China is punishing themselves. We don't need to do anything. The absolutely dumbest thing we could do is "retaliate" by deciding to limit our own supply (e.g. establishing a reciprical trade rule).
Perhaps Americans can show us how? (Score:4, Interesting)
Clues (Score:4, Insightful)
1. Closing off government software contracts to foreign firms isn't protectionism. It's common sense if you have any real concern about information security.
2. This is a few hundred million dollars worth of contracts at best. It will have virtually no impact on the world software industry.
3. China has a frozen currency. They are not interested in fair trade. "China has long maintained a fixed exchange rate between the yuan and the dollar, providing an indirect subsidy to help maintain its high-growth economy. Such currency control gives Chinese exports a 15 percent to 40 percent price advantage on global markets. That antimarket policy also discourages exports of American goods and services to China." --CSM. Of course this strategy is not without trade-offs, China runs the risk of sudden and severe inflation by pegging its currency artificially.
4. All of you anti-American, anti-capitalist, pseudo-intellectual nitwits are stunningly ignorant, yet refreshingly smug. Trying to decide whether your ignorance is the result of selective learning, indoctrination, or just sheer lack of cranial capacity could be an amusing pastime for one with a much stronger stomach than mine.
Thank you for your attention. You may fire at will.
Some Economics, Some Krugman (Score:3, Interesting)
In these situations (and software is obviously such a situation), only one company, one country, wins the race. And the winner doesn't necessarily match up with the country that had the classical comparative advantage. It matches up with the country that, at a given point in time, happened to be producing more than the other.
If in fact a country does have the classical comparative advantage, then it can improve their welfare (indeed, world welfare) if they close their borders, allowing that industry to grow. Once the industry has grown, capitalizing on the increasing returns to scale, you can open up your markets and take down the producers in the other country.
So there's an argument for doing it. But, it should be noted that even though Krugman pioneered justifications for protectionism, he remains an ardent supporter of free trade. There are a number of reasons for that, but in this context, the biggest problem is that a country doesn't know, and can't know, if in fact it has a classical comparative advantage in this product. In other words, it doesn't know that there will ever be a time when it can successfully open its borders. In this case, the country (and the world) are worse off.
Further, the act of closing your borders, even if good in the long run, still has costs in the short run. Not only do you need to be sure that you can ultimately take over the market, but you need to be sure that the long run gains are sufficiently high to warrant the short run costs. In the end, protectionist policies simply aren't worth the risk.
Oh, BTW, one country's trade policies, even a country like China, doesn't have that much to do with the trade deficit. If China stopped exporting to us entirely, the trade deficit might drop initially, but it would come back up as we increase imports from other countries. Ultimately, the trade deficit is driven by our national savings rate.
Wake up and smell the coffee, folks (Score:3, Interesting)
Now it's true that the economic impact in China is negligible because they don't buy software from the West at all - they steal it. And TFA quotes the USTA pathetically whining about how China is closing themselves out of the world's best software. WAKE UP, you fucking morons in the US Dept of Commerce: China wants the "best software in the world" to be made in China, not Palo Alto, not Redmond, not Bangalore, not anywhere else.
This is the first shot in a trade war aimed right at one of the few industries left where the US can honestly be said to have a technological edge.
Re:One effect (Score:3, Informative)
Well... (Score:4, Informative)
A friend of mine regularly chimes in that we have nothing to worry about from China because "...there is no way a nation that still has cases of Bubonic Plague and can't put electricity or roads across its entire landmass could possibly challenge US Superiority in what we do best..."
Re:Chinese middle class is the same size as US's (Score:4, Insightful)
Your contention that China's effect on the world should be similar to that of the U.S. based on its middle class population has some merit, but China also is in a different economic situation. Unlike the U.S., which is a mature industrial and post-industrial economy, China is in a high growth industrialization stage and in addition is offloading industrial production from Japan and the West. Therefore their IT needs may grow faster than those of the U.S. and they may indeed achieve some sort of dominance over software standards.
Whether this is a good thing is another question. Because laws in China are drawn up by technocrats and passed by fiat, they tend to represent a top-down view of how things should work. In the U.S. and other countries, standards are set by industrial consortia based partially on collective needs and partially on who's the biggest and richest on the committee. Whichever system prevails has yet to be seen.
The Chinese view the big Western companies as "hegemonist", especially the ones headquartered in the U.S., so they tend to reflexively oppose American-developed standards. Culturally, the Chinese have always been the "central kingdom" with their own language, history, technology and science stretching back thousands of years. They therefore tend to have a "not-invented-here" rejectionist mentality toward foreign ways. This is not to say that they don't copy stuff, but they try to sinicize it as quickly as they can, to translate it and get it to feel more palatable. It's quite likely that they're more comfortable with developing their own standards that may be based on IEEE, w3.org and so forth, but they will extend on them and make them work natively. The rest of the world can either go along and accommodate them or ignore them. Either way, we are in for some interesting times.
Re:One effect (Score:2, Informative)
Small nit to pick. China doesnt have over 2 billion. From CIA worldfact book its 1,306,313,812.
Otherwise... right on brother ! Im learning Manadrin .
Re:One effect (Score:3, Informative)
Ahem, you meant in China and India combined, didn't you? Both have about 1 billion populaion.
http://geography.about.com/cs/worldpopulation/a/m
Re:One effect (Score:3, Insightful)
Re:One effect (Score:3, Informative)
Re:One effect (Score:3, Interesting)
Re:One effect (Score:3, Informative)
Re:One effect (Score:4, Informative)
That's very interesting because: a) they've artificially pegged [cnn.com] the yuan-to-U.S.-dollar exchange rate at 8.2765 [x-rates.com] .78 Euros...
b) the U.S dollar has been dropping substantially in value in comparison to many other major currencies, over the last 4 years. In May 2001, it took about 1.14 Euros to buy 1 US dollar; now it takes about
The dollar's been rising lately though. At the beginning of the year, it only took .76 Euros to buy a dollar.
Assuming China's currency really is undervalued, because they're tied to the dollar at a fixed rate, then the US dollar is overvalued (or another currency tied to the dollar is). I'd guess that if China lets their currency float, then in theory the dollar (or the dollar and that other currency) will fall even more, which will make our exports cheaper to the rest of the world and make our imports (including spot market oil) more expensive.
Re:One effect (Score:2)
Re:One effect (Score:4, Insightful)
Are you talking about the US or Chinese?
Re:One effect (Score:4, Interesting)
Re:One effect (Score:3, Interesting)
Re:One effect (Score:3, Interesting)
And of course, the U.S. didn't respect international copyright for something like 100 years, until somewhere around the beginning of the 1900's. For example, everything Charles Dickens wrote was legally pirated in the U.S.
Ben Franklin was also a notable "pirate", way back when...
The rational back then was that it benefited the U.S. economy (which it did). <sarcasm>Of course, now it's just absolutely horrible when "Intellectual Property" rights aren't res
Open markets, govt. purchases not the same thing (Score:4, Informative)
Re:One effect (Score:2)
This is just one more sign that China should not be treated like Europe or the US.. Imagine if the US said that they were revamping thir policy around textiles and that no textiles could be purchased from outside the American industry. After all we are just trying to build an industry at home..
Missing the point (Score:3, Insightful)
Second, I have a feeling this has a lot more to do with security then building up their industry. If they are building their own code, they are a lot less likely to get stuff with backdoors build in. This isn't just paran
Re:Protectionism. (Score:2)
Re:Protectionism. (Score:2)
You mean like Kuwait? A country that has done nothing to build their military since the 91 gulf war. They rely on the U.S. to provide the military services. But they do have Oil! So what does that say about countries who outsource their energy needs?