A collaborative agreement between Qinghua University in Beijing and Microsoft has caused an outcry, led by a top Chinese computer scientist.  This three-year agreement specifies Qinghua’s participation in the Microsoft’s campus genuine software initiative, which requires that all on-campus computers, used by students and faculty members, install genuine versions of the Microsoft Vista operating system and Office 2007 suite.

This is the latest development for the software giant following the release of its “Black Screen” antipiracy patch last October.  Since then, an increasing number of schools are opting for the Linux operating system and domestic Office software packages.

The Qinghua University move angered Ni Guangnan, a member (yuanshi) of the Chinese Academy of Engineering and a crusader on behalf of the Microsoft monopoly in China.  Ni said that the agreement was misleading, as the usage of genuine software packages is not equivalent to choosing the Microsoft products.  Such an agreement should not be at the expense of domestic software products, he argued.

Moreover, according to Ni, the Vista operating system, which has not been well received worldwide, does not meet China’s information security standards. OOXML, the document format used in the Office 2007 suite, conflicts with China’s own standards as well.  In other words, these particular software products should not even be considered for use in China.

Indeed, the essence of the agreement poses challenges to the growth of China’s software industry.  In 2000 and 2002, China’s State Council issued two documents – “Policies for Encouraging the Development of Software Industry and Integrated Circuit Industry” and “Outline of the Software Industry Rejuvenation” – naming the software industry one of the pillars of China’s innovative economy.

The government’s policy measures include giving preferential treatment to domestically-developed software in government procurement.  It is no surprise that the government lends its support to the software industry, as according to a conservative estimate, China’s e-government market could be valued at as much as RMB 200 billion ($29 billion).

The supportive policy was reinforced by the Medium- to Long-Term Plan for the Development of Science and Technology. The plan offers a roadmap for China’s ascendancy as an innovation-oriented nation. It was released by the State Council in 2006, by Chinese Premier Wen Jiabao’s report to the second session of the Eleventh National People’s Congress in early March, and by the “Plan of Rejuvenating Electronic and Information Industry,” part of the nation’s economic stimulus plan.

However, domestic software products are important on paper in many occasions.  In 2004, for example, the Microsoft operating system and Office suite dominated the Beijing municipal government’s software procurement, which was reversed only after the Chinese software industry expressed outrage.

Now Qinghua University, a bellwether university in China, becomes the center of a controversy.  By picking up Microsoft products, the university has made a strong statement that domestic software packages are inferior.  Ni Guangnan is concerned that other institutions of higher education may follow suit.

As the case also reflects Microsoft’s massive and extensive liaison efforts, it remains to be seen whether Ni’s protest will lead to a change of the agreement at Qinghua University on the selection of software packages.