Bill Gates began his fourth visit to China in three years, in what is believed to be a bid to consolidate the company's position in the Chinese market.
Gates is officially in Beijing to open computer classrooms in Chinese schools. However, the visit takes place amid strong moves by competitors into the Chinese software sector. IBM, Sun Microsystems and Hewlett-Packard are working to put Linux onto the world's PCs, and the Chinese government has made clear it is keen to embrace a variety of software systems. This includes both Linux and Windows-based platforms as it seeks to develop its domestic industry, with the pendulum swinging toward Linux because of concerns about the cost of Microsoft's products.
Microsoft is also having to compete directly against China's homegrown software players, which, while still underdeveloped, have been improving their product offerings in recent months. The government, which accounts for over 40% of software purchases in China, has openly declared a preference for homegrown software.
Microsoft has moved to consolidate its presence, and over the past four years has opened three joint ventures, unprecedented for the company anywhere in the world. Last weekend it signed a deal with Changhong, the country's leading home appliance manufacturer, to cooperate in the multimedia area. State media reported today Microsoft is on the verge of announcing a new global partnership with a domestic IT distributor and software company, Digital China.