Ban on Unauthorized Software Benefits Domestic Software Industry

China vows to purge all unauthorized software from government offices by October. As many users worry that the move will expose them to exorbitantly high prices for copyrighted software, experts say the move will benefit the Chinese economy, domestic software companies and computer users in the long run. Tingting has more.

The National Copyright Administration, China's copyright industry watchdog, says central government departments must ensure that by the end of May all software installed in office computers is licensed. Local government offices must comply before the end of October.

The rampant use of pirated software has caused enormous losses to the industry. Research conducted by market intelligence firm International Data Corporation indicates that the piracy rate of China's personal computer software reached 79 percent in 2009. The estimated losses to the industry that year hit 7.6 billion U.S. dollars, doubling the figure from four years before.

The corporation further estimates that a 10 percentage-point decline in the piracy rate would increase the country's annual GDP growth by 21 billion U.S. dollars and create 250,000 jobs.

Wang Xiuling(王秀玲), from the China Copyright Administration, says the ban will benefit both foreign software giants and domestics companies.

"As the market for Microsoft and Apple covers the whole world, their losses in the Chinese market are relatively bearable. But for young Chinese software companies, their market is limited to China. If they face the threat of pirated software, it will be a life-or-death matter."

Many people believe the high price of foreign software products, which are too exorbitant for most domestic consumers to afford, is contributing to the prevalence of pirated software in China.

Insiders say more domestic research and development would be a solution to curbing high software prices. But piracy is strangling the development of the fledgling domestic software companies.

Wang Wenjing(王文京), CEO of UFIDA, one of China's top software developers, says that domestic companies have a competitive edge over foreign ones.

"Our service is faster. That means we can solve problems sooner. And we know the market better. If customers have individualized requests about their software, we understand them better and have a better chance to come up with better ideas."

China's software industry grew at a compound annual growth rate of more than 39 percent from 2001 to 2007 to reach 506 billion yuan. It is anticipated to grow by nearly 22 percent through 2012.

For CRI, I'm Tingting.