China's Hu to Meet With Microsoft, Boeing

SEATTLE – Chinese President Hu Jintao was opening his U.S. trip by meeting with Microsoft Chairman Bill Gates and other Seattle business leaders, part of a two-day whirlwind Washington state visit that will also include a stop at Boeing Co. (BA).

Hu has set an ambitious mission for his four-day U.S. tour, due to begin here Tuesday. It comes at a time of unease among American businesses, political leaders and the public about how China is using its new power.

His summit Thursday with President Bush will cover a broad agenda — from China's criticized currency and other trade policies, to its aggressive quest for oil and the developing nuclear programs in Iran and North Korea.

In the Seattle area, at least three groups planned to protest Hu's visit: Taiwanese-Americans calling on China to let the island of Taiwan make its own decision about whether to rejoin the mainland; Tibetans seeking independence for their homeland; and practitioners of Falun Gong, a spiritual movement considered an "evil cult" by China's communist government.

The visit comes as Microsoft Corp. (MSFT), after years of battling widespread software piracy in the potentially lucrative China market, is hopeful that things are changing. Chinese government officials say they are serious about cracking down on sales of illegal copies of Microsoft's Windows operating system, and some computer makers are pledging to ship more computers with legitimate Windows software installed.

One of those companies, Lenovo Group Ltd., met Monday with Microsoft officials to reaffirm Lenovo's 5-month-old commitment to ship computers with genuine operating systems. Microsoft held a similar meeting last week with Chinese computer manufacturer Founder Technology Group Corp., also among the companies that have pledged to promote legal Windows use.

Although analysts say it could be some time before the promised changes have a significant effect on Microsoft's sales, the pledges are a feel-good backdrop for Hu's visit with Gates and other business and government executives.

Chinese government officials promised their U.S. counterparts last week to fight software piracy, as they tried to ease tension over the record trade gap between the two countries.

For Microsoft, the move is important because it sees China as a major market in which to increase revenues.

Lenovo, which last year bought IBM's personal-computer business, is the world's third-largest computer company. In an interview Monday with The Associated Press, Lenovo Chairman Yang Yuanquing said 70 percent of the computers Lenovo sells in China are now loaded with licensed Windows copies, up from 10 percent six months ago.

Yang said the Chinese government has been a major force behind the change, both by requiring government agencies and big companies to install legal software and by cracking down on piracy.

Lenovo expects to buy $1.2 billion worth of Microsoft software in the next 12 months, including about $200 million for the Chinese market.

The company also is eager to improve protections on intellectual property because of its own international aspirations.