China has axed a software-buying policy that would have discriminated against Western firms such as Microsoft after bowing to international pressure and internal critics, government and industry sources said on Thursday.
The State Council, or cabinet, had been widely expected to announce a new policy this summer requiring a percentage of software bought by ministries and state-owned companies to be made by Chinese firms.
Rumours swirled that the minimum would be anywhere from 50 percent to 70 percent. That's big money in a fast-growing, multi-billion-dollar industry in which government purchases are estimated to account for up to a quarter of the total. But officials drafting the software-buying policy have decided to back off from the original, patriotic version.
"It was a discriminatory policy," a Beijing government source told Reuters. "You have companies like Oracle and Microsoft doing research, development and even production in China. You could argue their software is Chinese."