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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?
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.
How the U.S. can counter it?
Simple, the U.S. government should refuse to buy software from Chinese companies.
(I pity anyone that mods this insightful)
The Internet is full. Go Away!!!
We could... force 'em to um... only buy Microsoft stuff. That would teach 'em!
"We shall grapple with the ineffable, and see if we may not eff it after all." - Douglas Adams
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
Last time I was in China, I visited one of their top universities (SJTU) and they were selling versions of Windows that did not appear to be legal in stores on campus. So this probably won't affect them very much since they don't buy software anyway.
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.
"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.
How about a ban by the Chinese government on Chinese firms selling non-Chinese software to all the countries in the world?
It's a Chinese national security issue. The CCP does not trust software outside of it's own country for fear of hidden backdoors. They think Microsoft may have had the Pentagon place backdoors into Windows to be used in times of war.
Life is not for the lazy.
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..."
If you ignore the other uses of a tool, does that make the tool less useful, or you less useful?
China keeps giving themselvs huge rubs on the back and anyone who tries to move in on it gets a kick in the groin.
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.
I like muppets.
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.
Fly me to the moon Let me sing among those stars Let me see what spring is like On jupiter and mars
China is a huge trade manipulator (if not the biggest in the world). However, lets not pretend that we're innocent here, with our monstrous ag. subsidies. Furthermore, we violated the same rule we're now faulting China for in Iraq (only allowing bidding from COW countries; all government bidding on non-sensitive projects, by WTO rules, is to be open to any country)
Freeze Ray. Tell your friends.
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.
That's understandable. Knowing our fearless leader, he might declare that the terrorists are now coming from China, or have put their base of ops in China. The Chinese, having the Confucianism insight to forsee this, might wish to protect themselves. I can see it now, Dubya conquering China and holding up an "All your tellolists are berong to us." banner.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
John Snow (the U.S. Treasury Secretary) fired a warning shot [iht.com] at China's currency fixing policies. Intellectual properties concerns, and trade issues like the one cited in TFA are also commonly voiced from the adminstration.
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.
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
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
I work for a U.S. government contractor. One of the rules that we have to comply with is that all of our software must be produced in the united states. We can't use open source code because some of it could be written outside of the US. We can't buy licenses for software libraries that could be produced overseas. It's to protect us from potentially malicious code.
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.
There are plenty of things the US government will only purchase from US companies. If a country has no trade tarrifs or subsidies, their markets are open. You wouldn't advocate forcing corporations to purchase from foreign firms, why should governments be forced to? If the Chinese government doesn't want to purchase things from other countries, that is their right. If they start saying that no one can purchase things from other countries, then you can start invoking trade laws.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
This pertains particularly to discussions within the U.S. about the direction of our economy.
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.
when China's economy lights up the real power will start to change hands. Thank god.
Thank god, indeed.
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.
What part of "shall not be infringed" is so hard to understand?
Why complain about these things when America already does something similar? Perhaps Americans would like to demonstrate a huge open market by letting more foreign companys bid for defence contracts. I don't think the likes of Boeing or Lockheed Martin will do well with real competition though, will they?
over 2 billion people. about 1/3 of the world population is in China.
o stpopulous.htm
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
That's very interesting because: a) they've artificially pegged the yuan-to-U.S.-dollar exchange rate at 8.2765 .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.
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.
> 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.
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.
Democrat delenda est
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.