That’s not official policy of M$ but they want to receive their licensing fees for 90% of users of their software in China.
President Obama:“So we were just in a meeting with business leaders, and Steve Ballmer of Microsoft pointed out that their estimate is that only one customer in every 10 of their products is actually paying for it in China. And so can we get better enforcement, since that is an area where America excels — intellectual property and high-value added products and services.”
see US-China Press Conference at the Whitehouse
That’s an interesting statistic. 90% of users have obtained a copy without a licence/permission. They could have used GNU/Linux for little cost but their suppliers gave them that other OS. Presumably those same suppliers provided other software such as Office or PhotoShop or games to make the package attractive. If China cracks down further on this illegal supply-chain, will licensing fees result or will Free Software with a legal supply of usable software? Probably some of both. Given a choice of a higher-priced product with that other OS or the same old price with Free Software, there will be competition on price/performance and some will go either way.
We had read years ago that there was a crackdown that resulted in the growth of GNU/Linux. I expect another crackdown will have a similar effect. Perhaps the effect will be even larger now that manufacturers are cranking our GNU/Linux and Android/Linux systems in volume in China. The choice will not only be possible but readily accessible. Previous promotion of GNU/Linux has generated plenty of technical people familiar with GNU/Linux and many consumers have seen/used GNU/Linux by now.
Previous crackdowns did affect governmental agencies and large businesses but individuals and small operations went under the radar. M$ has failed to control this by technical means so I expect advertising/education by M$ and the government of China will be the major result this time around. China needs to increase local software development and either or both a vibrant Free Software and non-free software market need some pressure to break the illegal copying habit. M$ may get some cash as a result of the GDP of China but Free Software should grow as a simpler and legal choice. The supply chain needs to shift from paid licensing to a fee-for-service model. The customer may care little about the cost of individual software licences and the suppliers can make money either way or both. It’s all good.