Microsoft develops Windows 10 version for China’s government

  A China-specific version of the operating system will include greater control for administrators, support for custom data encryption preferences, and have updates and system data administered by a Chinese entity.

By Matt Day
Seattle Times technology reporter
May 23, 2017

  Microsoft has built a version of Windows 10 tailored for China’s government and state-owned corporations, baking into the operating system greater control for administrators and a pledge to not send any system usage data outside of the country.

  Terry Myerson, executive vice president of Microsoft’s Windows and Devices unit, announced the new version of the operating system at an event in Shanghai. The first customers of Windows 10 China Government Edition include China’s customs service and the city of Shanghai.

  Operating in China has been difficult for Microsoft and other Western companies, with services like Facebook banned entirely. Analysts attribute that to strict government control of the internet and technology companies, as well as a regulatory regime that often mandates partnerships with local companies to operate in the domestic market.

  The new Windows version was developed by CMIT, a joint venture between Microsoft and state-owned China Electronics Technology Group. CMIT will handle all system updates for the operating system, and none of the data on the operating system’s performance will leave China, Bloomberg reported.

   “We are aware this could be perceived as a sensitive issue but it’s quite appropriate for a sovereign country, within its own computer system and its own employees to have its own encryption systems,” Myerson told the news service.

  Microsoft’s offices in China were raided by government investigators in 2014 as part of an antitrust probe, and state agencies were discouraged from buying Microsoft products.

  Microsoft has tried publicly to repair relations with Beijing, and in 2015 hosted Chinese president Xi Jinping on the company’s Redmond campus.

  Xi and other Chinese officials have responded to U.S. and European criticism of the state’s crackdowns on free speech on the internet largely by saying governments are entitled to their own legal and regulatory regimes.

  Patrick Moorhead, an independent technology analyst, said the Chinese government would likely prefer to rely on an operating system built by a domestic firm under its oversight, but that’s unrealistic in a world of personal computers largely built to run Windows.

  “China does need Windows, and China needs to save face,” Moorhead said. “I think that the verbiage — a special version (of Windows) — benefits the Chinese government in telling their message.”

  Myerson told attendees at the event in Shanghai on Tuesday that the release of the new operating system followed a two-year government review of Windows 10.

  “We agree with the outcome of the review,” Myerson added, without specifying what the review had determined.

  “The Chinese government has the highest standards for security and trust,” he said.

  A Microsoft spokeswoman didn’t provide details Tuesday on the specific differences between the new Chinese variant of the operating system and the business-focused version it was derived from.

Matt Day: 206-464-2420 or; on Twitter: @mattmday.


Microsoft Cozies Up to China With a Custom Version of Windows
The Chinese government is getting a version of Windows just for its workers.
By Kif Leswing
December 17, 2015

  Microsoft will provide a customized version of Windows 10 to the Chinese government, the company announced on Thursday, as it continues to strengthen its relationship with Chinese regulators.

  The partnership is a major turnaround for Microsoft’s ambitions in China. In 2014, regulators conducted an anti-monopoly investigation into the company over Windows’ dominance in the market, and even banned government purchases of computers running the operating system.

  The custom Chinese version of Windows 10 will be “government-approved,” and will include Chinese-selected antivirus software. It will be distributed to Chinese government agencies and certain state-owned companies by C&M Information Technologies, a new Beijing-based venture created specifically for the partnership.

  From Microsoft’s blog post:
We’re announcing a new joint venture that will license, deploy, manage and optimize Windows 10 for China’s government agencies and certain state owned enterprises and provide ongoing support and services for these customers.

  The joint venture is not final, however. Microsoft says it is still subject to regulatory approval. The Chinese body participating in the joint venture is the China Electronics Technology Group. In September, Microsoft worked with CETG to make China’s top search engine, Baidu, the default homepage and search engine in its Edge browser in the region.

  For Microsoft, the partnership not only secures the company a huge customer likely to spend hundreds of millions of dollars going forward, but also gives the company firm ground in a vast market where many of Microsoft’s most important vendors—such as Lenovo and Xiaomi—are based.

  Microsoft says that “hundreds of millions” of PCs in China run Windows. However, one concern is that many of those copies are pirated. It’s very possible that Microsoft will look to work with Chinese regulators to try to crack down on software piracy.

  In September, Microsoft (MSFT, +1.13%)CEO Satya Nadella met with Chinese president Xi Jinpingto discuss concerns about intellectual property rights as well as how American tech firms can crack the huge market. Microsoft’s cloud server service, Azure, set up shop in China last year, partnering with Chinese company 21Vianet.

  The Chinese government can also chalk up its partnership with Microsoft as a win. Recently, Chinese officials have been publicly concerned about big U.S. tech firms including secret backdoors in its software in light of Edward Snowden’s revelations about the National Security Agency’s spying programs.

  China removed several U.S. tech firms from government-approved purchase lists earlier this year, and even started to develop its own alternative to Windows, called NeoKylin. The deal with Microsoft presumably will allow China to inspect its version of Windows 10 to ensure there are no hidden surprises that might compromise state security.

  Recently, it was revealed that China supports state-owned companies seeking to develop a homegrown secure smartphone operating system.

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