2011 June 06 Monday
Microsoft Sales In China Chump Change

When the US opened the doors to goods made in China the US was (in theory) supposed to make money off of intellectual property. But why pay for something when you can get it for free?

In his address to employees at the company's new Beijing offices, Mr. Ballmer said Microsoft's revenue per personal computer sold in China is only about a sixth of the amount it gets in India. He noted that Microsoft's total revenue in China, population 1.3 billion, is less than what it gets in the Netherlands, a country of fewer than 17 million.

In a world with worsening natural resource limitations rising buying power of the Chinese, enabled in large part by massive technology transfers, pushes up the costs of natural resources (e.g. oil). China's gains are part of a zero sum game that makes others poorer. Intellectual property theft undermines our ability to buy the resources we need to support our own living standards.

Share |      By Randall Parker at 2011 June 06 10:30 PM  China Mercantilism

MarkyMark said at June 7, 2011 1:30 AM:

I'm not sure it as simple as 'why pay if you can get it for free'. It might be, I have no knowledge of the Chinese mindset, but if China is anything like the West it is possible that Chinese people don't equate theft of intangible intellectual property in the same way they do tangible physical property.

In my youth I copied music cassettes from friends and perhaps even computer games and thought nothing of it. In fact parents would encourage their children to copy rather than fork out the hefty price for the genuine product. By the same token most parents would be extremely dissapointed in their kids for walking into a store and shop lifting a book or other item.

I have never stolen a tangible item but I don't feel about the same way about intellectual property. I recognise that it's not a rational view but once the idea catches hold it is hard to dislodge. It is also easy to think of justifications so that you can sleep soundly at night [i'm not saying i agree with these but these are the arguments} - hey bill gates has enough money already, he doesn't need any more from me!; why's he charging me for window's again and again when it's basically the same he must have made he dough millions of times over; microsoft has a monopoly and it's not fair that he has me over the barrel - he's charging me way too much; it's not costing him any extra if I get bits and bites sent to me; and finally any money I pay is only going to be sent overseas to help an american corporation so its a good thing that the money stays in my own country.

Lono said at June 7, 2011 9:26 AM:

China is NOT our friend.

(their Govt. specifically)

Tired yet? - Ron Paul FTW! - Time to Clean House!!

Lou Pagnucco said at June 7, 2011 9:54 AM:

Unfortunately, U.S. politicians, media and corporate leaders do not identify with American citizens.
- CEOs receive bonuses for transferring labor and technology
- Media ownership/control is now extremely concentrated and corporate
- Media writers receive covert bribes for promoting foreign products
- Politicians only succeed if they receive corporate funds and media approval
- Economists who promote the free-trade-myth are promoted in the media

The situation in all the Asian countries is quite different.

A few good analyses of America's ongoing demise -

"How the Press Stabbed Detroit in the Back"

"Japanese Import Restrictions? Shall We Draw You A Map?"

"How the Economy was Lost, Doomed by the Myths of Free Trade"

American elites appear to have thrown national interests overboard.

bbartlog said at June 7, 2011 12:25 PM:

'I don't feel about the same way about intellectual property. I recognise that it's not a rational view...'

On the contrary, it's highly rational. The idea of intellectual property is pretty much bogus. It has been promoted for utilitarian reasons. We want to encourage people to invent stuff, write books, make movies and music, and so on; thus we promote the idea that they should be allowed to maintain some control over the information/ideas they produce even after they're public. But equating such information (infinitely reproducible) with tangible property (one copy, you can't have it without someone else losing it) is a harebrained analogy. Describing such violations as 'theft' or 'piracy' is a deliberate attempt to use loaded language to encourage sloppy thinking and an emotional reaction. It is copyright or patent violation. It is not theft: no one has lost anything (except some measure of control over the actions of others).
I actually believe that the modern IP/patent system no longer serves its original purpose and should be abolished.

Mthson said at June 7, 2011 2:38 PM:

re: bbartlog

Just because we can pick up and feel physical assets, that doesn't make them more real/important. Property law in general serves no purpose other than that it's good for society and individuals, and that seems to be a good enough justification for intellectual property.

Things like excessive patent trolling, though, do seem high on the list of things we'd like to reform.

Check It Out said at June 7, 2011 2:56 PM:

Well I'm all in favor of piracy when books and other materials required for academic learning and culture become so expensive, specially for students.

Hey if they can photocopy text books or freely download ebooks, fine with me! Universities and schools in general shouldn't play sales reps for big editorial house or giant software company

Mercer said at June 7, 2011 7:55 PM:

What China is doing now is similar to what the US did 150 years ago. We did not respect other countries copyrights then. When the US went to war against Germany in 1917 we also stopped honoring German patents. They were world leaders in the chemical industry at the time.

China's pirating demonstrates a weakness of the US tech industry outsourcing it manufacturing to China. Patents and copyrights are easy for other countries to copy and there is little US companies can do to stop it. Do you really think the Chinese government will do much to protect the revenues of US companies?

Lou Pagnucco said at June 9, 2011 8:45 AM:

Why so much concern when the companies affected are increasingly exporting capital, technology, labor and income?

Regarding the Fortune 500 as American companies is antiquated.
Protecting their intellectual property has a ever diminishing impact on U.S. GDP.

Woozle said at June 10, 2011 4:31 PM:

Are there any figures on how many people are actually using Microsoft products? How to we know that some large percentage of that presumed "theft" isn't Linux installations?

China's gains are part of a zero sum game that makes others poorer. Intellectual property theft undermines our ability to buy the resources we need to support our own living standards.
The world would not be poorer if Microsoft were to quietly go away.
Randall Parker said at June 11, 2011 2:52 PM:

Woozle, The Chinese benefit less from using Linux than we do precisely because they bootleg. They don't have to shift to Linux to avoid licensing fees.

Woozle said at June 13, 2011 6:42 AM:
  • 2005-09-06 Microsoft Fights Piracy In China, Linux Wins: "As proprietary software vendors crack down on piracy, China looks to Linux as an alternative."
  • (date?) The State of Linux: Substantial Growth in Asia-Pacific
  • Wikipedia, Linux adoption (boldface mine):
    1. in 2008, Dell began shipping systems with Ubuntu pre-installed in China
    2. "In April 2009 Aaron Seigo of KDE indicated that most web-page counter methods produce Linux adoption numbers that are far too low given the system's extensive penetration into non-North American markets, especially China. He stated that the North American-based web-measurement methods produce high Windows numbers and ignore the widespread use of Linux in other parts of the world."
That's from about 2 minutes of Googling. It would be nice to have some actual numbers, though.

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