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Sybase CEO Urges Congress to Grant China PNTR, Citing Market Opportunity and Need for WTO Accession

Strategic Insights

— 1 min read

Sybase Chairman, President, and CEO John Chen recently addressed the House Ways and Means Committee, emphasizing the importance of granting China permanent normal trade relations (PNTR) and clearing the path for China's accession to the World Trade Organization (WTO). Chen highlighted the significant market opportunity in China, with the software market growing at an impressive 30% annually, driven in part by the rapid expansion of Internet users in the country.

Key Takeaways:

  • China's accession to the WTO is considered the industry's most effective policy tool to reduce rampant software piracy, which stands at 95% and constitutes an enormous market access barrier for U.S. companies.
  • The Chinese market presents an "unsurpassed opportunity" for Sybase and the entire U.S. industry, with about $1.75 billion worth of software sold in China in 1998.
  • The U.S. software industry accounts for an estimated 80% of all software sold by foreign companies in China.
  • Market access and software piracy remain the chief barriers to the significant market opportunity in China.
  • China has committed to comply with the TRIPs Agreement immediately as part of its accession to the WTO, providing a powerful tool in combating software piracy.
  • The industry is urging Congress to grant China PNTR as a necessary step to achieving these goals and harnessing China's self-interest in reducing software piracy.

Statistics:

  • Software piracy in China cost the U.S. business sector more than $800 million in 1998.
  • The duties, taxes, and other fees for importing software into China run about 30 to 40%.
  • China's accession to the WTO will require all signatories to zero out their tariffs on computer software and other information technology products.
  • The number of Internet users in China quadrupled during 1999 alone and is expected to more than double again by the end of the year.
  • The Chinese software market is growing at an impressive 30% annually.

Sources:

  • Business Editors/Hi-Tech Writers, WASHINGTON--(BUSINESS WIRE)--Feb. 16, 2000
  • The World Trade Organization (WTO)
  • BSA (Business Software Alliance)

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