Microsoft Gets OK to Sell Windows 2000 in China

HONG KONG (03/13/2000) - Windows 2000 has been approved by Chinese government authorities and will go on sale in China on March 20, Microsoft Corp. announced late last week.

China's Ministry of Information Industry (MII) and the State Encryption Management Commission (SEMC) have approved the sale of the simplified-character Chinese version of the recently introduced Windows 2000 operating system, which includes 128-bit encryption capability, Microsoft said in a statement.

The news follows recently introduced tight regulations, that went into effect on Jan. 31, governing the sale and use of foreign encryption products in China, which had raised concerns among some observers about the viability of products such as Windows 2000 in that country. [See "Beijing Tightens Internet Rules," January 27.]The most severe of the new rules, which outlawed the sale of products containing foreign-developed encryption software, has now been rescinded, after a circular issued by the SEMC last week said that only a certain type of encryption device, called a "black box," must be made in China, according to a news report today.

A Beijing-based Western observer familiar with Chinese government regulations confirmed in a telephone interview today that the SEMC has retreated from its earlier decree in at least one area.

"The SEMC issued a clarification of a previous regulation that greatly reduces the scope of the encryption regulation," the observer said. "Specifically, it only requires people to register encryption software itself, rather than any product that includes encryption."

Researchers at laboratory at Xi'an Jiaotong University recently developed a so-called black box device and hold the patent on it, according to a report published last month on the Web site of the official People's Daily newspaper.

The black box, a combination of hardware and software, has passed tests by the Ministry of Public Security for securing IP (Internet protocol)-based networks, according to the People's Daily report.

Approval of Windows 2000 is likely to bring a sigh of relief from Chinese companies and multinationals that had been planning to use the Microsoft operating system. In response to a query last month, Microsoft officials said several government agencies in China have been beta testers of Windows 2000.

The approval also comes as a bright spot in a relationship between Microsoft and the Chinese government that has been cloudy at times over the past several years. Some observers have pointed to concerns over the dominance of Windows operating systems as a source of tension. [See "UPDATE: Analysis: Microsoft in China: Giants Clash," Feb. 23.]Microsoft, in Redmond, Washington, can be reached via the Web at

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