China's Hu, `Friend' of Microsoft, Pledges Action on Piracy
April 19 (Bloomberg) -- Chinese President Hu Jintao pronounced himself ``a friend'' of Microsoft Corp. as he toured the largest software maker's headquarters and dined on smoked guinea fowl at Microsoft Chairman Bill Gates' lakeside home.
``Because you, Mr. Bill Gates, are a friend of China, I'm a friend of Microsoft,'' Hu told Gates yesterday during a demonstration of new software at the company's Redmond, Washington headquarters. ``Also, I am dealing with the operating system produced by Microsoft every day,'' he added, drawing laughter from Chinese officials.
Hu, who was stopping in Seattle on the first day of his visit to the U.S., has come under intensified pressure to crack down on software piracy. To foster goodwill, China's government in recent weeks ordered local PC makers to install genuine operating software on all machines before they leave factories. Four Chinese PC makers this month pledged to buy a combined $1.6 billion of Microsoft's Windows software.
Hu is scheduled to meet U.S. President George W. Bush tomorrow in Washington amid tension over an estimated $202 billion trade gap that the U.S. blames partly on copying of software and Hollywood movies. About 90 percent of software in China is counterfeit, the third-highest rate after Vietnam and Ukraine, according to the Business Software Alliance, a Washington-based trade group funded by Microsoft.
Washington is the second-biggest exporter to China among U.S. states by virtue of such Seattle-area companies as Microsoft, Boeing Co., the No. 2 builder of jetliners and China's biggest plane supplier, and Starbucks Corp. Still, while China is now the world's second-largest PC market, rampant piracy means it ranks as only the 25th biggest for software, according to Microsoft.
`Fantastic Relationship'
Hu told Gates the nation would back up its words in respecting intellectual property rights, according to a pool report. Hu spoke in Chinese and his remarks were translated into English by an accompanying official. Most of the tour was limited to a single news organization, which provided accounts to others.
Microsoft earlier this week called China's software mandate a ``breakthrough'' on the issue. ``It's a fantastic relationship,'' Gates told Hu during the tour. ``And if you ever need advice on how to use Windows, I'll be glad to help.''
Gates led Hu through the ``home of the future,'' which features experimental technology the company might someday sell. A vase equipped with a radio-frequency identification tag, for example, pulled up pictures of places where Hu has worked and lived when it was placed on a display screen.
In the kitchen, a counter displayed a recipe and instructions in Chinese for making focaccia bread, prompting Hu to ask if people would still need a housekeeper.
Software Purchases
Later, Gates and wife Melinda greeted Hu at his lodge-style estate overlooking Lake Washington, where the guests included former U.S. Secretary of State Henry Kissinger, Starbucks Chairman Howard Schultz and Microsoft Chief Executive Officer Steve Ballmer.
``Welcome to my home,'' Gates said, shaking Hu's hand in the home's main entrance, which has tall glass double doors and a sculpture of Abraham Lincoln.
In addition to lobbying China's government to clamp down on piracy, Gates has boosted Microsoft's investment in the nation and donated to Chinese schools to spur demand for its products. The U.S. software maker last year got only 1 percent of sales in China.
Lenovo Group Ltd., China's largest PC maker, said this week it will buy $1.2 billion of Windows software over the next year, adding to deals already announced by TCL Corp., Tsinghua Tongfang Co. and Founder Technology Group.
Champagne Toasts
While Gates led Hu on a tour of his estate, guests mingled on a grassy lawn overlooking Lake Washington. A U.S. Coast Guard patrol boat equipped with a machine gun patrolled the water about 100 yards away.
Guests led by Washington Governor Christine Gregoire toasted Hu with Dom Perignon champagne in a reception hall decorated with Chinese and American flags. The dinner menu featured smoked guinea fowl, Washington-grown asparagus and Alaskan halibut.
Today, Hu is scheduled to visit a Boeing factory and deliver a speech at the airplane maker's Future of Flight Museum in Everett, Washington. Chinese leaders have a long history of visiting Seattle, starting with Deng Xiaoping, who stopped there in 1979 after diplomatic relations were established between the U.S. and the communist regime.
Pool accounts were provided by the Associated Press and Reuters.
To contact the reporter on this story:
Peter Robison in Seattle at
robison@bloomberg.netLast Updated: April 19, 2006 04:11 EDT
