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  • Microsoft obliged to outsource jobs to China

    Posted by Ralf Goergens on October 2nd, 2005 (All posts by )

    From earlier this month:

    Microsoft is on track to outsource more than 1,000 jobs a year to China, according to blistering evidence released yesterday in Microsoft’s increasingly nasty spat with Google over an employee who jumped ship in July.

    In a revelation that highlights the complexity of China President Hu Jintao’s visit to Seattle and Microsoft on Monday, legal filings detailed claims of how Microsoft had offended the Chinese government by not outsourcing as many jobs as promised to Chinese technology vendors.

    Chief Executive Steve Ballmer visited China in 2003 and promised to step up the pace, from $33 million worth of work a year to $55 million a year, according to a statement by Kai-Fu Lee, a former vice president who left to work for Google in July. Lee was charged with smoothing over relations with China and finding jobs that could be shifted to Chinese contract workers.

    (Emphasis mine).

    This puts things into perspective, but still…:

    “We are growing our work force there and will continue to do so; however, that growth has not and will not replace jobs here in Redmond,” spokeswoman Stacy Drake said.

    The Chinese leadership has learned from the fate of the late Soviet Union, they are determined to keep things under control, no matter how far along economic liberalization is coming. Of course, tactics like these are pushing all the wrong buttons in the West. If there ever is a (inevitably highly destructive, mostly to China) trade war with China over this, it will be mostly due to Beijing’s short-sighted behavior. Unfortunately the risk is still worthwhile for the communists, in an extremely selfish kind of way, for they’d rather rule over a ruined country than have an increasingly prosperous China they are unable to control anymore.

     

    9 Responses to “Microsoft obliged to outsource jobs to China”

    1. Lex Says:

      “…they’d rather rule over a ruined country than have an increasingly prosperous China they are unable to control anymore….” They think they can “scale up Singapore”, as one person I know with lots of experience in China put it. They Party is determined to maintain control of an increasingly prosperous China. They think they can have propserity and control. They may be right. They are developing a new model of oppression, something the Soviets could not do: Oppression that delivers the goods. Let’s see how long they can keep that model going.

    2. mariana Says:

      Is this really a new model though? It just seems like a Chinese version of Nazi Germany.

    3. Lex Says:

      Mariana: The Chinese are less vicious, but way more patient and practical.

    4. Whitehall Says:

      “They’d rather rule over a ruined country than have an increasingly prosperous China they are unable to control anymore.”

      That certain seems to be a Commie thing, doesn’t it? Pol Pot, Fidel Castro, Ill Jung Kum (spelling?) all share that calculation.

    5. Jonathan Says:

      Lex wrote:
      They are developing a new model of oppression, something the Soviets could not do: Oppression that delivers the goods. Let’s see how long they can keep that model going.

      The difference between China and the USSR is that the USSR under Gorbachev implemented this new model clumsily and it failed earlier. In the long run I doubt that it will work for the Chinese dictatorship either. Centralized control reduces productivity always and everywhere. The Chinese leadership has to choose either to go the way of N. Korea, which I think is unlikely, or, if they really do want to be like Singapore, to loosen up their control to such a large degree as to threaten their hold on power. The current situation, which combines a high degree of oppression and a rapidly growing private sector, is unstable as newly prosperous Chinese aspire increasingly to democratic government.

      Singapore is a very mild dictatorship as compared to China. If China wants to be as productive as Singapore it will have to free itself politically to a much large extent than the Chinese junta wants. Something has to give and eventually will.

    6. Anonymous Says:

      “They are developing a new model of oppression, something the Soviets could not do: Oppression that delivers the goods.”
      I think that there are some (or many) other examples. Spain under General Franco for instance. At the end it was a rather prosperous society that did not bear the dictator.

    7. Jon Terry Says:

      Lex,
      The other great difference between the perestroika USSR and China is that the USSR was already on a downhill slide economically when Gorbachev took over. The strain of trying to build a modern state through central planning while spending copiously to fight us had bankrupted them. Perstroika was a desperate effort to halt the slide from an illusory period of national greatness at mid-century.

      For that matter, you still see news pieces about old Russians pining for Stalin. Isn’t Putin’s modern Russia trying the experiment again after their lost decade of oligarch pluto-democracy?

      China, on the other hand has had nowhere to go but up. They were poor and backwards under the late Manchus. They were poorer and backwards under the warlords. Then they were poor, backwards, occupied by the Japanses and wracked by civil war between the Communnists and Kuomintang. Then they faced years of psychotic oppression by Mao.

      Since the ascension of Deng, China has gotten richer and richer and richer. Could they possibly have done better under true capitalists with a democratic government? Probably.

      But the fact is the Communists have muddled their way through to dramatic improvements in the lives of most Chinese. I doubt very much that the Chinese Communist government has much to worry about until economic improvement has progressed to the point that growth slows as the economy matures and the price of the opportunites lost to state planning become more apparent and more painful.

      I suspect that for most Chinese the devil they know is preferable to the risk of instability so long as Bealzebub (or the Chinese equivalent) brings home the bacon.

      So yes, something has to give, eventually, but don’t hold your breath.

    8. mishu Says:

      They are developing a new model of oppression, something the Soviets could not do: Oppression that delivers the goods. Let’s see how long they can keep that model going.

      You mean like Pinochet?

    9. W Sol Vason Says:

      The Soviet Union adopted this same policy after world war I. It was called the New Economic Policy. In ten years the major Soviet cities were elictrified, wired for telephones and industrialized. Then, the industries were nationalized and 70 years of totalitarian misery began. You can study it now as history, or study it over the next eight years as current events.