Microsoft should be the proudest American company these days as it not only received a distinguished guest, China's president Hu Jintao, but also signed big orders of copyrighted software with four Chinese personal computer enterprises. After entering the Chinese market in 1992, Microsoft has begun to enjoy a flourishing business now. The reasons for its prosperity deserve an in-depth research.

Microsoft may not have achieved such a success in China without a favorable micro environment. After its WTO accession, China has been ceaselessly integrating itself into the international community and has also been restricted by international regulations. The protection of intellectual property rights (IPR) is part of the restrictions.

From the point of view of software, China is actively promoting installation of copyrighted software and centralized purchases of licensed software in its government departments. Microsoft's operating system succeeded in biddings frequently. In addition to government units, the Chinese government is promoting nationwide use of copyrighted software, which also benefits Microsoft.

From 1999 to 2001, the senior management of Microsoft visited China frequently to exchange opinions with Chinese leaders such as former president Jiang Zemin, former premier Zhu Rongji and also Zeng Peiyan, director of the State Planning Commission at that time. These leaders proposed that Microsoft could team up with the National Development and Reform Commission (NDRC) and the Ministry of Information Industry (MII). Later Microsoft adopted a lower profile and signed several projects with NDRC and MII in terms of investment, professional training and assistance to set up computer classrooms for high schools and primary schools in rural areas.

Microsoft no longer attempts to change China but adapts itself to China. Microsoft China adjusted its strategy to build up China's Microsoft and began to make efforts to understand China. The company has not made any profit in China but invested a large sum of funds to develop cooperation projects. Microsoft's investment in China can be best described with an old Chinese proverb "give in order to take". By doing so, Microsoft finally sees the twilight of making profit in China.
 
Editor: Yan