Microsoft has gained the approval of Beijing to sell its Windows 2000 software in China, calming recent fears that new rules on encryption technology would prevent the product launch planned for late October.

"It's full steam ahead," said Michael Rawding, Microsoft regional director for greater China. "All versions are approved by the Ministry of Information Industry and the State Encryption Management Commission for sale in China."

In January, china began to enforce rules that required companies and individuals to register their encryption products with the government, then apply for permission to use them, causing many to fear that this was just the first step toward an eventual ban of the sale of foreign encryption technology, something that is inevitably embedded in everything from software and mobile phones to cable television systems and Internet servers.

By approving Windows 2000, the State Encryption Management Commission has shown flexibility, according to Rawding. "We were in discussions with them constantly. We wanted an explicit pledge that they would not take punitive action against those products, because their release was imminent."

Microsoft currently dominates the Chinese market, installed in about 60 percent in China-based Web servers, with the rest of the market divided between such competitors as Linux and Netscape.