2004-11-26

China considers overseas software curbs

China's Ministry of Science and Technology made it clear in a statement on Thursday that the nation is poised to issue rules about the extent to which government departments must favor local software, raising concerns that some overseas vendors could be cut out of the large state procurement market.

Draft policy details shown to people in the industry this month suggest that government buyers will be ordered to distinguish between software that is "domestic", "non-domestic" and "preferred non-domestic".

The government says "national interest and security" are the main reasons for the move.

Software procurement emerged as a hot topic this week after the purchase of a reported Rmb29m ($3.5m) worth of Microsoft software by Beijing municipal government.

Chinese rivals say they were not given a chance to bid, and local media questioned the decision to support a US "monopolist" rather than local suppliers.

However, Michael Mudd, of the Computing Technology Industry Association, said the proposed separate treatment for "foreign" software was unlikely to help China's software sector and was worrying some of the international trade group's members.

"The direction is of concern," Mr Mudd said. "Their concern is that this is a precursor of a preference policy."

Many local companies hope for quick action. "As Chinese software companies, we hope we can get more support from the government," said Chris Zhao, executive president of Red Flag, which sells products based on the Linux operating system.

Departments will have to apply for special permission to buy "non-domestic" software.

Source: CE.cn

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