Much has been made of tariffs, but few have talked about the myriad of soft costs when it comes to international trade. Sharing my personal experience of Microsoft and the China market.
I can confirm that we tried everything both to conform to government requests and to prove value to Chinese computer makers. It was impossible to get paid for our software. There was always an excuse and another complaint or requirement.
Steve, I was trekking across the pond to China as early as 1984, and I remember those stalls everywhere. Before there was a paywall using various versions of software, I recall exactly what you describe. Wondows 3.1 was everywhere in China and I never saw a legitimate copy, EVER. During the enhanced security during Steve Ballmer's tenure, it changed nothing in China it only takes one good copy to blanket the country. Your analysis is spot on. Now, we have a unique time to reset manufacturing for us, by us. This reset cannot be squandered, because without the security to make things, we play the pawn for an continuing emboldened China, where stealing our IP and the rule of law is stardard operating procedure. It must stop!
I'm from China, but I have to admit that what you mentioned reflects some very real situations. There are indeed a few challenges we still face that I personally find quite inefficient:
There's a tendency to "reinvent the wheel" — even when existing open-source software is available, efforts are made to create a domestic version by simply modifying and repackaging it.
Reluctance to pay for value — even if a solution helps generate 100 units of value, paying even 1 unit for it often triggers hesitation, price pressure, and prolonged negotiation.
Unhealthy internal competition — including undercutting prices below cost, hoping to gain market share and build a narrative, regardless of sustainability.
Many products are built only for local needs, with little regard for global compatibility. This ultimately limits access to broader international markets and, unfortunately, leads to a situation where low-quality offerings crowd out better ones.
Very insightful. I had no idea on how hard it was to do business there. That’s insane.
I can confirm that we tried everything both to conform to government requests and to prove value to Chinese computer makers. It was impossible to get paid for our software. There was always an excuse and another complaint or requirement.
There is no fair playing field in China.
Steve, I was trekking across the pond to China as early as 1984, and I remember those stalls everywhere. Before there was a paywall using various versions of software, I recall exactly what you describe. Wondows 3.1 was everywhere in China and I never saw a legitimate copy, EVER. During the enhanced security during Steve Ballmer's tenure, it changed nothing in China it only takes one good copy to blanket the country. Your analysis is spot on. Now, we have a unique time to reset manufacturing for us, by us. This reset cannot be squandered, because without the security to make things, we play the pawn for an continuing emboldened China, where stealing our IP and the rule of law is stardard operating procedure. It must stop!
I'm from China, but I have to admit that what you mentioned reflects some very real situations. There are indeed a few challenges we still face that I personally find quite inefficient:
There's a tendency to "reinvent the wheel" — even when existing open-source software is available, efforts are made to create a domestic version by simply modifying and repackaging it.
Reluctance to pay for value — even if a solution helps generate 100 units of value, paying even 1 unit for it often triggers hesitation, price pressure, and prolonged negotiation.
Unhealthy internal competition — including undercutting prices below cost, hoping to gain market share and build a narrative, regardless of sustainability.
Many products are built only for local needs, with little regard for global compatibility. This ultimately limits access to broader international markets and, unfortunately, leads to a situation where low-quality offerings crowd out better ones.