China Orders Computer Makers to Install Software Before Shipping

China's computer manufacturers must install operating software before their goods leave the factory gates, the latest effort to address the thorny issue of piracy before President Hu Jintao visits the United States.

The order was given in a notice issued jointly by the Ministry of Information Industry, the State Copyright Bureau and the Ministry of Commerce on March 31 and released to reporters on Monday.

Chinese counterfeiting is a major irritant in U.S.-China trade and American software firms have said they want to see progress on the issue at the 2006 meeting of the U.S.-China Joint Commission on Commerce and Trade in Washington on Tuesday.

"Computers manufactured within the country's borders should have pre-installed authorized operating software systems when they leave the factory," the notice said.

Wang Ziqiang, director of the copyright management department at the State Copyright Bureau, said the notice was not about reacting to foreign criticism.

"This is not because of foreign pressure," he told reporters. "This is about the country's economic development."

Computer manufacturers and operating systems providers must also report to the Ministry of Information Industry before the end of February each year the number of computers sold and the number of operating systems installed.

Work units or individuals found to be installing pirate software would be investigated by the Copyright Bureau, the notice said.

Some computer manufacturers were already moving toward pre-installing operating systems.

Last week, TCL Group, which mainly makes televisions and mobile phones, signed an agreement with Microsoft Corp. (MSFT) to pre-install its Windows operating systems on all of its personal computer product lines.

Hu is scheduled to visit Microsoft's headquarters before he meets President Bush on April 20.

But Wang said it would be up to China's computer manufacturers, which include market leader Lenovo Group Ltd. and its second-largest PC maker Founder Technology Group Co. Ltd., to decide what operating systems to use.

Foreign PC makers would also be affected by the notice, which mandates that retailers install operating systems on imported computers before they are sold.

Dell Inc. (DELL), the third-largest PC seller in China, and Hewlett-Packard Co. (HPQ) have been aggressively pushing into China's ultra-competitive PC market.

A separate notice issued jointly by four ministries mandates that all government departments ensure the computer equipment they purchase is installed with authorized software.