It is a well-documented fact that intellectual property laws and enforcement in some nations is sorely lacking, and this, for example, is one reason why outsourcing in those nations has not grown at a faster pace than we have seen.

China is a key player in this scenario, and recent talks between U.S. President Barak Obama and President Hu of China have addressed another key problem—software piracy in China, where numerous reports say that pirated software is commonly sold on street corners and online.

Not unexpectedly, Microsoft CEO Steve Ballmer was among the corporate executives in Washington, D.C. on Jan. 19 for Hu’s visit, reports online news source TechFlash. It was in that context that the U.S. President cited comments made earlier in the day by Ballmer regarding software piracy.

“Steve Ballmer of Microsoft pointed out that their estimate is that only one customer in every 10 of their products is actually paying for it in China,” says Obama in a White House transcript. “And so can we get better enforcement, since that is an area where America excels—intellectual property and high-value added products and services.

“And the Chinese government has—to its credit—taken steps to better enforce intellectual property,” Obama adds. “We’ve got further agreement as a consequence of this state visit. And I think President Hu would acknowledge that more needs to be done.”

Gee, that sounds nice, doesn’t it? I’m sure there was a lot of smiling and nodding of heads at the appropriate time when these things were said. Unfortunately, there was a lot that remained unsaid. First and foremost, we are offered no details on just what will be done and when it will be done. Some online sources note that the Chinese government is reluctant to come down on the illicit software trade, because it contributes significantly to local economies in that nation.

Then again, we shouldn’t forget that the Chinese military has been implicated in cyber-attacks on the U.S. Department of Defense, and on Google. There was also that little episode last year in which Chinese servers were used to temporarily hijack a good percentage of worldwide Internet traffic. We’re still not sure why that happened or what they did, but the Chinese government is denying everything.

So the politicians posture and spout sanitized dialogue while in the real world, things are not so peachy. Insurers are eager as ever to expand their business into China, but can our vendors afford to have their software illegally copied and used? Will those same insurers compensate our industry software providers for pirated applications used in China—in order to keep things cordial with their Chinese business partners?

Don’t hold your breath on that one. When it comes to China, our country and our industry remain blissfully in denial, despite openly hostile policies and actions. One wonders how much of this we can stomach, but it seems that money will provide the ultimate antacid for such woes.

Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at ara@aratremblytechnology.com.

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The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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