U.S.-China trade talks may boost U.S. software makers

High-level trade talks held Monday between the U.S. and China could benefit U.S. software makers by further opening China’s government market to them, and through increased efforts by Beijing to clamp down on pirated software.

The Chinese government assured U.S. trade representatives that proposed regulations which would have prohibited U.S. software companies from competing for government procurement contracts would not be issued in their current form, according to a transcript of speeches made after the talks by U.S. representatives.

The draft regulations had threatened to shut U.S. software makers out of a market with a potential value of $8 billion, according to the U.S. Commerce Department.

Chinese officials had apparently proposed the measures to encourage the use of domestic software.

“We also had a commitment from the Chinese government today to redouble their efforts … to join the WTO (World Trade Organization) government procurement agreement,” said Rob Portman, U.S. trade representative, according to the transcript.

Such a step would ensure that U.S. software could be used by Chinese government entities and state-owned companies, he added.

U.S. software maker Sybase praised the results of the talks, calling them a “significant success” for U.S. business and saying the market openness will also aid in the development of China’s software sector.

Chinese government officials were not available for comment. However, China’s official Xinhua News Agency said the trade talks achieved important progress.

As part of the discussions, China also vowed to complete a program to ensure that all central, provincial, and local government offices are using only licensed software by the end of 2005. It will extend the program to public and private enterprises next year, according to U.S trade officials.

In addition, Beijing agreed to increase the penalties of end-user piracy to include administrative and possibly criminal penalties, to curb the use of counterfeit software. U.S. trade officials welcomed the pledges, but said they would focus on results in terms of dollars, not arrests.

Last year, 90 percent of all software installed on personal computers in China was pirated, compared to 21 percent in the U.S., according to the Business Software Alliance.