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Monday, 16 February 2015

What exactly was Bill Gates doing in China last week?

This Kat has recently described (here and here) what appears to be the increasing efforts by China to rearrange the existing norms for technology transfer and IP in furtherance of its own strategic goals. Against that backdrop, this Kat noted a brief piece that appeared last Friday on reuters.com entitled “Bill Gates meets with China technology minister: ministry.” The gist of the report was that Gates, in his capacity as a representative of the Bill and Melinda Gates Foundation, met last week with China’s technology minister. All that was reported was that Gates and the Chinese minister discussed cooperation regarding “innovative development.” No mention was made of Microsoft, although Gates remains a member of the board and he devotes approximately one-third of his time to providing advice to the current CEO.

The Foundation is particularly renowned for its efforts in public health. Whether this was the focus of their discussions or whether Microsoft issues specifically, and high technology more generally, were also considered, is anyone’s guess and Kat-readers are invited to reach their own conclusions. That said, it is worthwhile recounting several of the recent developments mentioned in the piece that arguably served as the back-story for this meeting, the common denominator of which is the increasingly more challenging environment that US high tech companies are finding when dealing with China:
1. The week before last, various business lobbies in the U.S. appealed to the White House to help them in overturning new cybersecurity regulations that, they claimed, would have deleterious effect on American business and employees.

2. A week or so earlier, U.S. high tech groups were in communications with Chinese official about the same issue.

3. There is a general concern that Chinese regulators, most notably competition and tax regulators, are targeting U.S. concerns. In that connection, Microsoft is the focus of an investigation by the competition authority.

4. Further, a Microsoft subsidiary in China was hit in November 2014 with a charge of $140 million dollars for back taxes in what is described as “cross-border tax evasion in China.”
The Gates visit to China is only one more piece of this moving puzzle as China seeks to assert is identity on the way that technology is developed, transferred and protected. This Kat has the sense that the story will only take on increasing importance in the months and years to come. Stay tuned.

1 comment:

Anonymous said...

Open up them pearlies, Gates
Smile broadly, tho‘ it grates
Press the flesh with Chinese regulatory!
Open Windows, if you can
To avoid an outright ban
Ease pain on US companies

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