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Effects of China's Software Policy on World Economy?
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?
It's kind of funny to see the US squirm now that the shoe is on the other foot. Suck it back guys, and reap all the goodwill you've earned. I guess you can tell I'm a bit bitter on how the US ignores NAFTA rules when it suits them, and (illegally) wrecks other countries economies to improve their own. Hell the USA can't even follow the treaties it does sign. /schadenfreude
These regulations would ban non-Chinese firms from selling software to the Chinese government.
So whats to stop US companies from opening 'chinese' companies?
air and light and time and space
It helps China.
It helps India.
But for some reason it's labeled as "evil" by the political elite in the USA.
We have outsourcing for engineers; but not for lawyers, politicians, police and the military. I wonder why?
What steps might the U.S. take to attempt to counter it?
Uh, none? It isn't any of the U.S.'s business... literally!
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I didn't realize the Chinese Government had such a big slice of the software economic pie. Remember, this is just bans other countries from selling software to the Goverment, not the whole country.
The Digital Couture Collection
In principle, this is bad. This is protectionism, and protectionism is a Bad Thing.
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.
but here is the thing, are they saying the head corporate office has to be in china, or are branch offices are fine. Or does the company have to be completely chineese owned. Where is the line drawn for this?
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"isn't this a (sic) unfair trade move by the Chinese government"
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.
The global economy is a great thing until you feel it locally.
It makes a hell of a differents, because the chineese will no longer (if they decide to use linux) use non free formats and generations of chineese will not grow up accostumed to MS software, but to linux.
Freedom or George Bush
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.
for the last time people, I am "frodo from middle eaRTH", not "middle eaST".
What steps might the U.S. take to attempt to counter it? We could stop buying Chinese textiles, for one.
a Government wanting to limit the software it depends on to the companies it has the most control over and best access to? If a country relies on a foreign written and supported software, who knows what problems arise. Unless you are in the business of making software, you better be able to trust who you're in bed with to provide it, because you are less likely to know what coded inside.
Max: "You mind if I drive?" Sam: "Not if you don't mind me clawing at the dash and screeching like a cheerleader."
China is not doing anything illegal. It is restricting what software the Government can buy. As long as they don't stop companies and people in China from buying foreign software, it's perfectly legal.
Imagine respecting international trade laws! Kind of a stretch, given a mafia government that respects nothing but power, and the money that flows from it.
Are you talking about the US or Chinese?
There is a perfectly logical reason a government should only buy from it's companies of it's nationality. In fact, all governemnts should do this, including the US.
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.
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Y'know, they're not actually charging that much - they ask Chinese for absurd prices too. It's not just foreigners, it's everyone. The only reason you're paying less than the locals is that they know that you have to to haggle.
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.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
Riiight. And thats why China can run over their students with tanks, disappear and torture dissidents, censor the internet, and STILL have a valued trading partner status with the US?
China is everything Saddam was, PLUS they have REAL weapons of mass destruction, not just imaginary ones photoshopped into satellite photos. We blast the shit out of Iraq, but if we even thought of pulling the american mouth away from China's ass, China would cut all the trade lines and let America's economy wither. Hell, the damage to Wal-Mart alone would be an economic disaster. How can they keep their low prices without cheap shit made in China?
Good point. What's important to notice is who the US government is helping and why. Our government is interested in serving the rich inside our country because we are a plutocracy. The Chinese government IS the plutocracy, so naturally, they want to do things to benefit the industry inside their own country, the exclusion of all other industries.
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.
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.
Bill Stewart
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True enough. Have a look at credit card debt. The jobs are leaving, but the expenses are staying high. Creditors carry very little risk any longer (especially since the signing of the bankruptcy bill). Predatory lending is a great way to bilk those people that use their credit cards for necessary expenses such as medical care.
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 3-card monte will always benefit them.
They don't need to do anything... who's going to sue the chinese government??? GPL doesn't mean squat to them.
This is exactly what the US does do.
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.
And you're clueless.
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 that no one outside of Microsoft has the capability to build the software (and even MS has a difficult time there) so how do you know the source anyone has been given matches the binaries? Inserting (and masking) any backdoors would be fairly trivial.
It's also absurd to think that an American company wouldn't take such an action if asked/ordered to by the government--ANY company in ANY country would do so if their respective governments came calling.
What part of "shall not be infringed" is so hard to understand?
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.
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I would actually think it's an economic decision. Unlike more tangible products, software can be made anywhere. The money the Chinese government hands over goes directly into the foreign economy.
On the other hand, if it goes to a Chinese software company (or company based in China), the money spent on the software will go to local employees, who will spend it buying local groceries, etc. Lots of Chinese citizens get income from that one government expenditure, i.e. the multiplier effect.
OTOH, while I can undertand a preference for Chinese companies, a blanket policy banning foreign companies seems a bit silly, considering the maturity of the Chinese industry. Extra consideration for being local, but still looking at one's needs, seems more appropriate.
First, this is not a trade issue and the US will do nothing in response because no treaties or rules have been broken. This is a piece of government policy. If you go to China, you can bring Microsoft, you just can't sell it to the government. This ONLY effects the Chinese government.
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 paranoia either. During the first gulf war the US wiped out the Iraqi air defense network with viruses they stuffed into printers bought in the US.
That said, I have this is going to be a mixed blessing for a while. Building your own code base from scratch is really not going to be easy. Mix in the absolutely terrible accountability and management issues of the Chinese government and you are talking about a disaster waiting to happen. It isn't that China doesn't have good coders. They have good and bad coders like the US, it is more that the government is unlikely to be able to tell the difference.
Finally, if the US is going to raise a stink about trading policies, it will be over currency. Hell, just glance at the days bussiness headlines if you want an Economics 101 from the bickering back and forth.
You must be new here, on slashdot everything is Bush's/the Republican's fault. You obviously must not be drinking the Slashbot Group Think Kool-Aid(TM)!
You have to bash Bush/Republicans if you want to be seen as "informative" and "insightful." I is sooo easy to to, just make any crap about them up and it will get instantly modded to 5+.
But don't speak the truth, present any facts, or say you are a Republican/Bush supporter, that will get you modded down flamebait/troll. If you do something like that, you must be 100% wrong for going aginst the Slashbot group think.
Since the US doesn't allow export of strong encryption, people should't use any! right guys? Seriously, why China gouvenement would buy American software anyway, they want control, and they have all the control they want with existing open source solution that they can enhanced themself, with nobody looking over their shoulder. I would'nt like anyway my gouvenement to buy American software if open source alternative exist, my taxes are not suppose to pay american share holders!
The chinese definitely want to be certain that their software is not compromised. I too have heard about a proprietary fork of Linux being developed for governmental use.
The US government has taken it upon itself to depose governments it deems opposed to its own "ideals". China realizes that it falls into that category. They're looking to protect their infrastructure in two ways; first by preventing media from re-educating its youth - aka censorship. They know that's a losing battle. You can't win when the other guy offers drugs and porn on demand (the other guys would be us). Second, they're trying to preserve the integrity of their grid by obscuring its protocols.
that's a double edged sword. In my estimation, the reason the money guys have always had a problem as far as coding goes is that, for the most part, THEY CAN'T READ CODE. So even with your most loyal engineers, you ASSUME loyalty, because the bureaucrats and venture capitalists can't assure it for themselves. This is a huge hole in the CODE FOR THYSELF strategy. The coders REALLY HAVE ALL THE POWER. This leaves room for backdoors-for-hire... lots of black market cash to be made, etc... Imagine Mao telling scribes what he wanted in The Little Red Book, himself being unable to read or write. *shrugs*
(I think it's an interesting time for coding in general, because I tend to think of coders as this new underclass (undervalued by virtue of the fact that there are so many of them across regions with differing monetary systems), but literate (and thus possessing an information processing and storing advantage) to a degree that by and large supercedes the general population. Imagine the world after someone writes the Little Binary Book? Imagine, virtual populace, virtual governments - people don't tend plots of land, they tend lines of code - But I digress... )
But other than that, it makes good sense from China's perspective to eliminate the effect the United States has on its own populace and infrastructure. Increased US influence can only erode the Chinese power system; as such it should be feared and otherwise rallied against. So if I were the Chinese, I'd want Microsoft off my servers and clients too. In fact I'd want them out of my country. Nor would I want Google. Really... especially Google. Every time I think of Google these days, I think of the movie PI (by Darren Aronofsky - http://www.imdb.com/title/tt0138704/). The protagonist searched for a pattern in PI, and for a pattern in the stock market, which... all coincided with the pattern for God. Anyway, I can imagine that Google has its hands on a bundle of patterns these days. Again, I digress.
That said, you can find almost any movie on the street for like a buck. That alone would have Mao turning in his grave.
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While I certainly wouldn't call China undeveloped, it's most certainly not a superpower. A large economy doesn't make one a superpower alone, nor does possession of some nuclear warheads, or else India, Pakistan, and Israel would be considered superpowers. To be considered a superpower, a nation must have the ability to project its influence significantly beyond its borders, and I would argue that there is still only one nation that can do this through economic, political, diplomatic, and (if necessary) military means, and that is the United States.
This doesn't mean that other nations with significant economies cannot make themselves a real nuisance -- or worse -- on the world stage. However, those nations have more difficulty projecting themselves in other ways. For instance, China has a great deal of economic power, and has some diplomatic power in the form of its UN Security Council veto power, but has substantially less political power because there are few nations that really want to emulate China specifically, and even less military power because it has almost zero capacity to project military power much beyond its immediate neighborhood.
Other nations have different balances. India has some political power through its position as the world's largest democracy, although this is tempered somewhat by the touchy relations with its Muslim community and continued strains with Pakistan over Kashmir. It is a growing economic power, though less than China. India's military power is also rapidly growing, and its coming addition of the MiG-29 capable carrier Admiral Gorshkov, recently purchased from Russa, will provide it with a heavy naval strike capacity that its current Sea Harrier carriers lack, and put it into a class in which only the US, UK, and France currently exist. Yet it has far less diplomatic power than many of its neighbors due to a lack of a Security Council veto and due to strained relations with its neighbors.
Other nations have small militaries and economies, but wield disproportionate diplomatic and political power to their size because they are perceived as being above many of the squabbles and frays in which other nations involve themselves. But even nations like the UK aren't superpowers despite their influence over nations around the world, their powerful militaries, and strong diplomatic and political presence, because their ability to weild all of these at the same time are limited.
It's a hard thing to become a superpower-class nation long enough to get that designation, and even harder to maintain that status -- ask the Soviet Union about that.
You can never go home again... but I guess you can shop there.
Tyranny isn't the worst enemy of a democracy. Cynicism is.
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"?
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.
China's population is about 1.3 billion (see the CIA World Factbook on China). The United States' population is about 295 million (see same source). Therefore China is closer to 4x the US population. Interestingly, while China's one-child policy would cause a population implosion around 2050 if maintained, the U.S. may grow to 500 million if the current trends in immigration continue.
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.
it's = "it is"; its = possessive. E.g., it's flapping its wings.