China Software
More than a year and a half ago, Idescribed the situation that Microsoft faces selling software to China. Now the Chinese government has recently mandated that government-related procurement must use only local (Chinese) software. The U.S. government makes similar demands in procurement contracts, but for China this is much more significant, since the economy is far less privatized and government-related companies account for the bulk of the the software economy. As I previously opined on this blog, I am not surprised at all by the Chinese decision. This is exactly as I described the Chinese government concept of national self-interest. I do not believe that things are going to get any better for western software companies. There are too many factors driving China to develop a self-sufficient domestic software industry. I also think that today’s stories of the Japan+China+Korea anti-MSFT alliance are mostly crap. China will no more depend on a Japanese OS than on a U.S. OS; at most this implies that Japanese and Koreans will be submitting code which China would leverage in their domestically-controlled OS, but this is what would have happened anyway without the announcements.
Speaking of China acting in self-interest, I have been amused by the recent reports of U.S. pressure on China to switch to a floating currency exchange rate. The papers prior to Snow’s visit were full of predictions that China would easily fold to the pressure. But the pitch seemed to be a rather pathetic “We in the U.S. are experiencing unemployment, so could you please adjust your exchange rate and share the pain?” It seemed like a collossaly unpersuasive argument, and apparently that is how the Chinese saw it. The articles today claim that the U.S. “saved face”, but in the end it is still a big, fat “no”. The part the papers have left out is how the U.S. has recently deliberately allowed the dollar to devalue in order to “share the pain” with Germany and Japan, thus prolonging the recession in those countries in order to strengthen the U.S. economy.
Speaking of newspapers’ dereliction of duty, I recently stumbled across an old (1993/4?) Time Magazine article puff piece on Yugoslavia’s “Gazda” Jezda Vasiljevic. Basically, the theme of the piece was that Jezda had been ousted from Milosevic government and was forming a “government in exile” in Israel, with the intention to go back and overthrow the mean old dictator and institute real reforms. Other papers around the time repeated the same puffery, some of them on google. The interesting thing is that he was back in Milosevic’s inner circle within a year or two, and I can find no record of the papers ever issuing retractions or “maybe we were wrong about Jezda”. Apparently the real truth was that he was sent to Israel by Milosevic to arrange purchase of arms from the Israelis. In the past two years he has been in the news periodically, in jail for corruption, then released, then refusing to testify at hague tribunal, and so on. It is now open-season on anyone formerly associated with the Zemun Clan, but he remains very shadowy, always skating away. One gets the impression that the real story of this guy would be very fascinating, but all the papers give us is fiction. Remember Jezda next time you hear the Time Magazine ads that say “reading Time is like having your own intelligence agency!” What a load of crap