Doing Business in China: Speak Softly and Don’t Carry a Stick

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It’s a pretty firm rule of doing business in China that you don’t want to get on the bad side of those people who regulate your industry. Like bureaucrats in other areas (think sports here), they tend to take the attitude that anybody openly defying them should be immediately squished as an example to others. But when you are trying to deal, as Microsoft has to, with rampant piracy that is losing you tens of millions (hundreds?) a year, it’s a delicate path to negotiate. Thus when there was a howl of complaint on the internet when Microsoft unleashed (I’d link to our post on this but we still seem to be having problems with transferring over our archives and comments) an anti-piracy campaign earlier this month that turned some fake Windows users’ screens black, some people wondered whether there would be an official reaction. After all, Microsoft had certainly hurt the feelings of some Chinese people. Now we know. Here’s a story on official reaction from today’s South China Morning Post (which is behind a paywall; hence the full story). Bottom line: standing up for your rights is ok. Just don’t do anything more than complain though:

A vice-director of the National Copyright Administration has reprimanded software giant Microsoft, saying it used “the wrong methods” to protect its intellectual property rights.Yan Xiaohong said yesterday in Beijing that although the Chinese government supported companies standing up for their rights, businesses should be careful in how they do it.    

Mr Yan was asked to comment on recent moves by Microsoft to blacken the computer screens of people who used illegal copies of Windows XP and Office software.

People who updated their software installed a plug-in that turned their screens black.

Microsoft intended this as a warning against piracy. Although the black screen does not harm computers, the move has upset many users on the mainland who accused Microsoft of holding them hostage and invading their privacy.

Microsoft has said the update is not compulsory, and that it would enable users to determine if their copies were counterfeit or genuine.

Yesterday Mr Yan weighed in on the controversy, saying Microsoft had ignored the interests of users in developing countries.

“Standing up for its own rights, of course, is important,” Mr Yan was quoted as saying by Xinhua. “But resorting to a `black screen’ is something else, and we are concerned about such a move.”