SHANGHAI, Oct. 21 (UPI) -- Microsoft Corp. Chairman Bill Gates and Chinese President Jiang Zemin might have little in common when it comes to capitalist theories and free-market ideals. Just the same, unlikely bedfellows often make good business partners, as the saying goes.
Gates, who attended a series of meetings with other top business leaders at the Asia-Pacific Economic Cooperation forum in Shanghai, unveiled plans to increase investment in the Chinese computer market.
He said the Redmond, Wash., -based company is in talks with several Chinese companies, including computer maker Legend Holdings, to develop pocket and even tablet-sized computers that can recognize Chinese characters.
"We haven't announced any tablet PC collaboration, but we are in early discussions with companies here about taking the tablet concept and building a version that is appropriately targeted for the Chinese market, including Chinese handwriting recognition," Gates said.
China, which is trying to stimulate its high-tech sector, welcomed the announcement and pledged to provide more access to its markets for investors.
As a result of this move, software giant Microsoft stands to boost its share in one the world's largest untapped computer markets.
"We continue to increase our resources here in China," Gates said. "I'm very pleased with how Microsoft China is developing."
"Our commitment to the market and our confidence in the market is clearer today than it's ever been," he said adding that the software firm would create 300 new jobs at a technical center in Shanghai and open a new joint venture.
The announcement follows Microsoft first-quarter earnings released last week that -- despite beating Wall Street's expectations -- showed a 42 percent decline.
The software company reported strong sales despite the tough environment for the PC industry. Excluding a $1.2 billion investment, the company said, earnings would have been 43 cents a share.
Global revenues were $6.13 billion, up nearly six percent from the $5.8 billion a year earlier, reflecting the company's shift in focus to other markets.
However, a major concern for foreign software manufacturers is copyright piracy, which is rampant in China.
A study conducted Business Software Alliance, an international organization representing software and e-commerce developers, estimates that more than 94 percent of the software being used by Chinese businesses is not licensed, worse than the 91 percent rate a year earlier.
"We have seen pockets of progress, but it is far from complete within those pockets, and it is certainly not complete across the board," Tom Robertson, vice president of BSA, said.
Piracy in the Asia-Pacific region cost the software industry $4 billion in 2000 out of total global losses of $11.8 billion, Robertson said. Sales of packaged software in China will total $1.5 billion this year, ranking 15th in the world, he added.
Robertson said some cities in China, such as Shanghai and Beijing, were improving copyright protection laws, adding that more efforts are needed
"Software licensing is something that we do think we see signs of increasing respect for," Gates told reporters when asked about copyright protection.
But the risks seem well worth the potential for a number of foreign software makers attending the APEC forum.
Hewlett Packard Chairman and Chief Executive Carly Fiorina announced on Friday the company would open a software development center in Shanghai in November, which is expected to create 1,500 jobs.
"I am pleased to announce that we are celebrating our 20th anniversary in China by launching a major software development center here in Shanghai next month," she said in remarks at the APEC CEO summit on Saturday.
Gates, who gave a futuristic multi-media presentation at the summit, with flashing lasers and smoke machines, she said.
Fiorina added, "The market's going to grow, has shown nice growth every year, but it's really based on the 10-year picture that explains a lot of our attention to China."
