Microsoft, which is in talks to buy part of the Chinese video app TikTok, is one of the few American tech titans to have succeeded in China.
The software giant has kept its business alive in the country by complying with strict local laws, despite widespread censorship from the communist nation.
Here are some key points about the gaming and technology group’s operations in the world’s second-largest economy.
– A pioneer –
Microsoft arrived in China in 1992 and opened its largest research and development center outside the United States. It now employs about 6,200 people in China.
The ubiquitous Windows operating system is used in the vast majority of computers in China, even though Beijing promised in recent years to develop its own operating system. However, the company’s success has a downside, as its software is widely pirated.
The important Chinese market, which is very restrictive for foreign firms, represents a drop in the ocean for Microsoft’s business, accounting for just 1.8 percent of its turnover, President Brad Smith said earlier this year.
Microsoft’s Bing is one of the few foreign search engines operating in China, although it lags far behind its local competitors Baidu and Sogou, who dominate the market.
– Bill Gates –
Microsoft founder Bill Gates has long represented a model of success in the eyes of many Chinese, and his books are the best-selling in the country.
President Xi Jinping visited the company’s headquarters on a state visit to the United States in 2015, where he met with Gates and his wife.
Today, as director of his Bill & Melinda Gates humanitarian foundation, the 64-year-old has the prestige of a head of state in Beijing.
In February, Xi wrote Gates a letter thanking him for his support during the coronavirus epidemic.
– Censorship and control –
China censors all topics deemed politically sensitive in the name of stability, and Internet giants are urged to block unwanted content online.
By refusing to comply with Beijing’s strict demands, US giants Facebook, Twitter, Instagram, and YouTube, as well as Wikipedia and various other foreign media, are being blocked by China’s “great firewall.”
Microsoft, however, operates its professional LinkedIn network in the country in compliance with draconian censorship rules through a local joint venture.
Skype and Teams, its other two big platforms, are also available in China.
However, not everything was easy, with Bing temporarily offline last year, prompting speculation that censors had blocked the search engine.
Smith told Fox Business News at the World Economic Forum in Davos that “there are times when there are difficult negotiations with the Chinese government.”
The website Greatfire.org, which tracks online censorship in China, accused Bing a few years ago of redacting results that contain sensitive information.
– Video game –
In 2000, Beijing stopped the sale of all consoles due to their alleged negative effects on the “mental health” of young users, although they were still available illegally.
After the ban was lifted, Microsoft in 2014 was the first foreign company to break into the video game market in China with its Xbox One console.
Also in 2014, the Chinese competition authorities opened an antitrust investigation against Microsoft and its Windows software.
Around 100 inspectors raided the group’s offices in four Chinese cities, confiscated files and questioned employees.