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Tuesday, April 18, 2006 - Page updated at 12:00 AM

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Intellectual piracy, censorship on agenda

Seattle Times business reporter

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On a white board inside a nondescript conference room on the Microsoft campus, the names of visiting Chinese dignitaries and Microsoft executives are lined up in a sketch of a receiving line, along with notes about presentations and translators.

It's testament to the painstaking detail the company has considered to ensure its meetings with Chinese President Hu Jintao today go smoothly.

Protocol is always important to the Chinese. It's even more so on this occasion: Microsoft is the first foreign company Hu will visit as president.

"We've been working very hard day and night to try to get everything nailed down," said Fengming Liu, general manager of corporate and government affairs for Microsoft China. "We'll continue to work on it until show time."

The visit comes at a time when tensions between Washington, D.C., and Beijing have increased over trade issues and concerns about Chinese censorship of the Internet.

Pulling it off will require a delicate dance. On one hand, his hosts have to bring up topics that matter here, among employees and the public. On the other, they have to be careful not to offend their first-time guests.

Both Microsoft and China have a lot at stake in their relationship.

The visit fits in with China's aims over the next five years to move beyond low-wage, resource-intensive manufacturing and become a more technology-driven economy, said Tim Chen, Microsoft CEO for the Greater China Region.

Microsoft executives will accompany Hu on a tour of the company's Home of the Future and may talk about some projects under way in Microsoft's Beijing research lab.

"For him it's important to look at newer technology," Chen said. "Software is very critical to the knowledge economy."

Chen said he expects Hu to focus his scheduled policy speech Wednesday on U.S.-China issues, including intellectual property, the main thorn in Microsoft's side. Gates will introduce Hu before the speech. Last week, as a prelude to Hu's visit, China announced rules requiring that new computers be sold with legal, not pirated, software.

But Internet censorship has been, in some ways, a tougher issue. U.S. companies want to offer e-mail, blog sites and other services to a growing Chinese market. They've had to comply with onerous censorship laws within China at the same time they face increasing pressure from Congress and the U.S. public not to do so.

After years of difficulty, Microsoft and the Chinese government have finally found some common ground on intellectual-property protection, said Pamela Passman, vice president for global corporate affairs. They'll try to do the same on the censorship issue, one of a range of topics expected to come up during discussions in Redmond.

"We think there's opportunity for the Chinese government, the U.S. government and Chinese and U.S. industries to have a dialogue," she said.

Kristi Heim: 206-464-2718 or kheim@seattletimes.com

Copyright © 2006 The Seattle Times Company

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