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Chinese president's itinerary for U.S. visit: Gates first, Bush later
By Choy Leng Yeong and Hui-yong Yu Bloomberg News
THURSDAY, APRIL 13, 2006
SEATTLE President Hu Jintao of China starts his U.S. visit next week in Seattle with a dinner at the lakeside home of Bill Gates, the chairman of Microsoft. On the menu: a reminder of why China needs to crack down on computer-software piracy.
In addition to the usual talk about bolstering trade, leaders in the state of Washington say they will press Hu to beef up protection of U.S. companies' intellectual property.
Washington is one of the biggest exporters to China among U.S. states by virtue of Seattle-area companies like Microsoft, the world's biggest software maker, and Boeing, the No. 2 builder of jetliners and China's biggest plane supplier.
The stakes for Microsoft and the state's 4,000 other software companies are high. They are eager to tap potential growth in China because sales are rising more slowly in the United States. While China is now the world's second- largest market for personal computers, rampant piracy means that it ranks as only the 25th-biggest market for software, according to Microsoft.
"We have so much homegrown intellectual property here and a lot of it is at risk in the Chinese market," said Joe Borich, executive director of the Washington State-China Relations Council, a nonprofit trade group in Seattle backed by companies including Microsoft and Boeing.
Hu's stop in Seattle on April 18 and 19 is part of his first visit to the United States as China's president. He meets President George W. Bush the following day in Washington, D.C., amid rising tension over the massive U.S. trade deficit with China.
Gates, who had met Hu's predecessor, Jiang Zemin, will welcome Hu at the digital "home of the future" at Microsoft's headquarters in Redmond, Washington, on April 18. The dinner will follow at his home.
There, Governor Christine Gregoire of Washington state will greet Hu along with 100 guests, including Howard Schultz, chairman of the Seattle-based Starbucks, and Lee Hartwell, the Nobel laureate in medicine who is president of the Fred Hutchinson Cancer Research Center in Seattle.
Microsoft has been lobbying the Chinese government to crack down on software theft. About 90 percent of software used in China is pirated, according to the Business Software Alliance, an international trade group.
Last year, Microsoft started blocking computer users running illegal copies of its flagship Windows operating system from downloading Windows updates.
Microsoft has also cut prices in Latin America to make genuine copies of its products more attractive in a region where pirates operate.
On April 19, Hu tours the Everett, Washington, jetliner factory of the Chicago-based Boeing, which employs 63,570 people in the state. Boeing reached a tentative agreement this week with the Chinese aviation authorities for 80 planes worth $5 billion.
The policy focus of Hu's Seattle visit will probably be a speech later that day at Boeing's Future of Flight Museum in Everett, during which he may discuss intellectual property protection, said Gary Locke, a former Washington governor who organized the visit. Locke is now co-chair of the China practice at Davis Wright Tremaine, a Seattle law firm that represents Starbucks in China.
Chinese courts have been "very inconsistent," said Locke, who was the first Chinese-American governor in U.S. history.
"There needs to be more uniformity and more aggressive enforcement of intellectual property rights," he said. "We need to make sure that the government authority will enforce the court orders and shut down the people copying these products."
In January, Starbucks, the world's largest coffee retailer, won a trademark lawsuit against a Chinese company. A Shanghai court ordered Shanghai XingBake Coffee Shop to pay Starbucks 500,000 yuan, or $62,400, in damages and to stop using its name and logo, which translates to Starbucks in English.
Chinese leaders have a long history of visiting Seattle, starting with Deng Xiaoping, who stopped there in 1979 after relations were established between the United States and the Communist regime. Boeing says its jetliners now make up 63 percent of the Chinese fleet. Washington state's exports to China reached $5.1 billion in 2005, exceeded only by California's $7.9 billion.
In addition to lobbying, Gates has bolstered Microsoft's investment in China and has donated to Chinese schools as he tries to spark more sales of software, including Windows and Office business applications. Microsoft's sales rose 8 percent in fiscal 2005, slowing from the 14 percent gain the previous year.
Intellectual property "is a critical is- sue," said Pamela Passman, Microsoft's vice president of global government affairs. Piracy costs U.S. companies as much as $250 billion a year in lost sales, according to the U.S. Chamber of Commerce.
China has said that it was addressing software piracy. A joint mandate from three state agencies, dated March 30, required locally made computers to be installed with genuine operating software before leaving factories.
The Chinese computer makers TCL and Tsinghua Tongfang said April 6 that they would spend a total of $180 million to buy Windows licenses in the next three years.
Passman at Microsoft called it a "significant" mandate that, if followed by Chinese companies, might help to resolve "a huge hurdle in the marketplace."
By Choy Leng Yeong and Hui-yong Yu Bloomberg News
THURSDAY, APRIL 13, 2006
SEATTLE President Hu Jintao of China starts his U.S. visit next week in Seattle with a dinner at the lakeside home of Bill Gates, the chairman of Microsoft. On the menu: a reminder of why China needs to crack down on computer-software piracy.
In addition to the usual talk about bolstering trade, leaders in the state of Washington say they will press Hu to beef up protection of U.S. companies' intellectual property.
Washington is one of the biggest exporters to China among U.S. states by virtue of Seattle-area companies like Microsoft, the world's biggest software maker, and Boeing, the No. 2 builder of jetliners and China's biggest plane supplier.
The stakes for Microsoft and the state's 4,000 other software companies are high. They are eager to tap potential growth in China because sales are rising more slowly in the United States. While China is now the world's second- largest market for personal computers, rampant piracy means that it ranks as only the 25th-biggest market for software, according to Microsoft.
"We have so much homegrown intellectual property here and a lot of it is at risk in the Chinese market," said Joe Borich, executive director of the Washington State-China Relations Council, a nonprofit trade group in Seattle backed by companies including Microsoft and Boeing.
Hu's stop in Seattle on April 18 and 19 is part of his first visit to the United States as China's president. He meets President George W. Bush the following day in Washington, D.C., amid rising tension over the massive U.S. trade deficit with China.
Gates, who had met Hu's predecessor, Jiang Zemin, will welcome Hu at the digital "home of the future" at Microsoft's headquarters in Redmond, Washington, on April 18. The dinner will follow at his home.
There, Governor Christine Gregoire of Washington state will greet Hu along with 100 guests, including Howard Schultz, chairman of the Seattle-based Starbucks, and Lee Hartwell, the Nobel laureate in medicine who is president of the Fred Hutchinson Cancer Research Center in Seattle.
Microsoft has been lobbying the Chinese government to crack down on software theft. About 90 percent of software used in China is pirated, according to the Business Software Alliance, an international trade group.
Last year, Microsoft started blocking computer users running illegal copies of its flagship Windows operating system from downloading Windows updates.
Microsoft has also cut prices in Latin America to make genuine copies of its products more attractive in a region where pirates operate.
On April 19, Hu tours the Everett, Washington, jetliner factory of the Chicago-based Boeing, which employs 63,570 people in the state. Boeing reached a tentative agreement this week with the Chinese aviation authorities for 80 planes worth $5 billion.
The policy focus of Hu's Seattle visit will probably be a speech later that day at Boeing's Future of Flight Museum in Everett, during which he may discuss intellectual property protection, said Gary Locke, a former Washington governor who organized the visit. Locke is now co-chair of the China practice at Davis Wright Tremaine, a Seattle law firm that represents Starbucks in China.
Chinese courts have been "very inconsistent," said Locke, who was the first Chinese-American governor in U.S. history.
"There needs to be more uniformity and more aggressive enforcement of intellectual property rights," he said. "We need to make sure that the government authority will enforce the court orders and shut down the people copying these products."
In January, Starbucks, the world's largest coffee retailer, won a trademark lawsuit against a Chinese company. A Shanghai court ordered Shanghai XingBake Coffee Shop to pay Starbucks 500,000 yuan, or $62,400, in damages and to stop using its name and logo, which translates to Starbucks in English.
Chinese leaders have a long history of visiting Seattle, starting with Deng Xiaoping, who stopped there in 1979 after relations were established between the United States and the Communist regime. Boeing says its jetliners now make up 63 percent of the Chinese fleet. Washington state's exports to China reached $5.1 billion in 2005, exceeded only by California's $7.9 billion.
In addition to lobbying, Gates has bolstered Microsoft's investment in China and has donated to Chinese schools as he tries to spark more sales of software, including Windows and Office business applications. Microsoft's sales rose 8 percent in fiscal 2005, slowing from the 14 percent gain the previous year.
Intellectual property "is a critical is- sue," said Pamela Passman, Microsoft's vice president of global government affairs. Piracy costs U.S. companies as much as $250 billion a year in lost sales, according to the U.S. Chamber of Commerce.
China has said that it was addressing software piracy. A joint mandate from three state agencies, dated March 30, required locally made computers to be installed with genuine operating software before leaving factories.
The Chinese computer makers TCL and Tsinghua Tongfang said April 6 that they would spend a total of $180 million to buy Windows licenses in the next three years.
Passman at Microsoft called it a "significant" mandate that, if followed by Chinese companies, might help to resolve "a huge hurdle in the marketplace."
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