More Than Just a Factory Floor Now

From the Economist blog:

When Google pulled out of China back in March, it must have hoped that other Western technology heavyweights would show a little solidarity. Not that it expected others to follow suit, but at least some declaration of support. It didn’t happen. In fact, Bill Gates suggested that Google’s move was nothing more than a publicity stunt: “They’ve done nothing and gotten a lot of credit for it,” he said.

Mr Gates’ reaction is partly to be explained by Microsoft’s rivalry with Google. But his attitude—and that of most other IT executives—can largely be explained by the fact that the industry’s centre of gravity continues to move east (or west, seen from Silicon Valley): in IT, China is hard to ignore. The country is not just the sector’s biggest factory floor: Foxconn, the world’s largest contract manufacturer, which made headlines after a series of suicides in its factory city in Shenzhen, employs 800,000 workers, most of them in China. It is also home to two of the largest telecoms equipment makers, Huawei and ZTE. And China is now even more important as an IT market after its government started promoting domestic demand in the wake of the financial crisis.

China’s power in IT will only grow. It is pushing its own set of technical standards, not least by co-operating with Taiwanese firms (such as MediaTek, which makes most chips for handsets that are built in China). And at a conference of high-level representatives from both countries it emerged that they may promote Google’s Andoid as the operating system of choice.


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