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Cablegate: Microsoft's Craig Mundie Lobbies for Intellectual Monopolies in China

Cablegate



Summary: A look at cables where Microsoft's Craig Mundie (one of the very top chiefs) is mentioned as involved

According to the following Cablegate cable, "Microsoft Chief Research and Strategy Officer Craig Mundie to Peking University Guanghua School of Management Dean Zhang Weiying emphasized China's need to create an environment that would allow innovators to be financially rewarded for the risks they took to innovate. They cited the need for real intellectual property rights..."



In other public talks, Mundie was bashing the GPL. It matters because Mundie is influential [1, 2] and he speaks to influential people (he is also among those attending Bilderberg meetings). The following two cables help us see where he's making these engagements (see ۦ7 in the first cable and 1045-1145 for the middle eastern programme in the second cable).








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UNCLAS SECTION 01 OF 04 SHANGHAI 007085

SIPDIS

SENSITIVE SIPDIS

USDOC FOR 4420/ITA/MAC/CEA/MCQUEEN USDOC ALSO PASS TO NIST AND BEA STATE PASS USTR USTR FOR STRATFORD/WINTER/MCCARTIN/ALTBACH/READE TREASURY FOR OFFICE OF INTERNATIONAL INVESTMENT TREASURY FOR OASIA/ISA -- DOHNER, HAARSAGER AND CUSHMAN GENEVA PASS USTR PARIS PASS TO USOECD

E.O. 12958: N/A TAGS: ECON [Economic Conditions], EFIN [Financial and Monetary Affairs], EINV [Foreign Investments], ETRD [Foreign Trade], PGOV [Internal Governmental Affairs], PREL [External Political Relations], CH [China (Mainland)], WTO [World Tourism Organization] SUBJECT: INNOVATION REQUIRED FOR CHINA'S ECONOMIC GROWTH

REF: BEIJING 23856

ۦ1. (SBU) Summary: The National Bureau of Statistics and the U.S.-based Conference Board hosted a national forum on Innovation and China Economic Growth October 20- 22 in Suzhou, Jiangsu Province. During the conference, PRC officials from the Chinese People's Political Consultative Conference (CPPCC), National Bureau of Statistics (NBS), People's Bank of China (PBOC) and the Shanghai Stock Exchange, as well as representatives of foreign multinational corporations, discussed "self-innovation" and identified systemic changes necessary to foster innovation in China. The systemic changes included: increased IPR protection, financial sector liberalization, openness to the world, and creation of a society in which failure was acceptable. End summary.

---------------------------

CHINA: Big, but not Strong

---------------------------

ۦ2. (U) CPPCC Vice Chairwoman Zhang Meiying stressed in her keynote address the importance that China's leadership has placed on innovation. Zhang said that while China's total GDP made it the fourth largest economy in the world, on a per capita basis, China ranked only 110th in the world. This showed that China was a big country, but not a strong country. According to Zhang, under President Hu Jintao's leadership, China has decided that the way to create strength from size is through self innovation.

ۦ3. (U) Zhang said that rapid growth over the past twenty years had placed strains on national resources that would lead to decreased economic development. China needed to rely on innovation to create a foundation for sustainable growth. China had a low proportion of clean, high-technology industries. China's leadership realized that the environment was not a free commodity and that environmental damage would devour many of China's economic gains. While China manufactured low-technology items, it was dependent on other countries for its high-technology needs. Additionally, China's consumption of energy and raw materials per unit of production far exceeded that of developed world and was not sustainable, she said. If China did not develop its own human resources, China would continue to be only the manufacturing base for the rest of the world.

ۦ4. (U) According to Zhang, in major industries, such as the petroleum and electronics industries, China was dependent on imported technology for 75-80 percent of its needs. She said that China needed to learn to innovate to create its own core technologies. She said that China needed to "digest technologies from other countries" before it could "re-innovate these technologies for other purposes." China needed to generously fund its own scientists to insure its "leap-frog in development." She also criticized the "longstanding planned economy mindset" in China that meant that companies were too passive -- not taking on risks or investing in the future. As a result, she said, these companies were not positioned for success, and China lagged behind. Zhang's speech was widely quoted and referred to by other government speakers during the course of the weekend conference.

SHANGHAI 00007085 002 OF 004

-------------------

What is Innovation?

-------------------

ۦ5. (SBU) When asked how the Chinese government defined "self-innovation," National Bureau of Statistics (NBS) China National Research Association Secretary General Zhang Zhongliang said: "China is a big country, but it has no power. China needs to import 90 percent of its technology. China needs to develop its own name-brands and self-proprietary technology so that it can build a strong economy. To be a strong country, China needs to develop its own innovative abilities."

ۦ6. (U) In his talk, Development Research Center of the State Council (DRC) Deputy Director Liu Shijin outlined what was meant by self-innovation. He said that the three kinds of innovation are prime innovation, re-innovation, and the integration of innovation from abroad into China. Liu said that foreign companies with investments or joint ventures in China had expressed their concern with China's emphasis on self-innovation and begun to limit their investment in innovative areas. He tried to put them at ease by explaining that any innovation done in China by foreign companies located here was actually "Chinese self-innovation" because ultimately these companies would contribute to the building of China and its capabilities. Ministry of Commerce Vice Minister Shang Ming was more explicit when he said, "Self-innovation does not rule out the importation of innovative technologies from abroad."

--------------------------------------------- ----------

Requirements for Innovation - IPR and Financial Reforms

--------------------------------------------- ----------

ۦ7. (U) Multiple speakers from Microsoft Chief Research and Strategy Officer Craig Mundie to Peking University Guanghua School of Management Dean Zhang Weiying emphasized China's need to create an environment that would allow innovators to be financially rewarded for the risks they took to innovate. They cited the need for real intellectual property rights to protect innovation and a competitive financial sector that fostered "innovations" such as venture capital and other mechanisms for the efficient distribution of financial resources.

ۦ8. (U) People's Bank of China Vice Governor Su Ning said that due to increased global competition, China needed to tear down restrictions in the financial sector. He said that Chinese banks needed to reform and innovate in order to increase their margins of profitability. He also said that China needed to reform its regulatory framework to allow for financial products such as bonds, funds, options and other ways to diversify financial risk. He stressed that China needed a unified credit database to enable efficient access to financing.

ۦ9. (U) Shanghai Stock Exchange (SSE) President Zhu Congjiu noted that while there was 30 trillion RMB (about USD 3.8 trillion) worth of capital available in China, Chinese companies had a "weak capability to engage in venture capital." He said this

SHANGHAI 00007085 003 OF 004

was why quality companies chose to go public abroad, rather than in China. It also meant, he added, that 83 percent of all venture capital in China was from foreign sources. According to Zhu, the SSE planned to make the reforms necessary to keep Chinese companies in China by creating an environment where they would have access to the capital they needed domestically. In response to a question, Zhu admitted that for the financial sector, "innovation" actually meant reforming the Chinese system to be more like the international financial market standard.

--------------------------------------------- ---

Innovative Translation -- Some Words Left Unsaid

--------------------------------------------- ---

ۦ10. (SBU) The conference theme as translated in English was "Innovation and China Economic Growth." In Chinese, however, the title was "Self-Innovation (Zizhu Chuangxin) and China Economic Growth." Chinese government speakers all used the word "self-innovation," but the translators uniformly translated it as "innovation." Conference speaker European Union Economics and Regional Officer Leila Fernandez-Stembridge noted to Econoff that this appeared to be an intentional "mistranslation." Price Waterhouse Coopers Senior Advisor Kenneth DeWoskin, another conference speaker, speculated that a political decision had been made to de-emphasize the Chinese-centric focus on "self" in an attempt to soften the tone of the conference.

---------------------------------------

When Innovation Means Using an Airbrush

---------------------------------------

ۦ11. (SBU) DeWoskin noted to Econoff that the "palpable unspoken undercurrent" had been the sacking of NBS head Qiu Xiaohua eight days before the conference in connection with the Shanghai pension corruption scandal. No mention of Qiu was made publicly, even when Xie was introduced as only having been on the job for a week. An NBS employee who helped organize the conference materials told Econoff about the "huge amount of work" that he had to re-do in replacing Qiu Xiaohua's information and name with that of new leader Xie Fuzhen in all of the many professionally produced bound conference materials. An NBS press officer commented that his office had been given no notice of the sacking and been inundated with "questions we cannot answer."

-------------------------------------

Challenges Facing Innovation in China

-------------------------------------

ۦ12. (SBU) Sixteen non-governmental speakers at the conference, including Sun Microsystems Vice President Piper Cole, GE China Technology Center Managing Director Bijan Dorri, and The Conference Board Executive Vice President Gail Fosler, China were tasked with outlining how China could create and nurture an environment that led to innovative people and companies. These speakers described several challenges that China faced to its

SHANGHAI 00007085 004 OF 004

drive for self-innovation, including:

- China needed to stay open to the world. Innovation would be greatly hampered in a closed system.

- China needed to avoid "nationalizing" or "branding" its innovations in a way that would limit its global reach. By creating a "China standard" different from global standards, China would shut itself out of competition.

- China needed to protect intellectual property rights in order to protect those who had taken risk.

- China needed to create the financial market conditions that would support venture capital in order to reward risk takers.

- China needed to create a social milieu in which failure was acceptable. If the price of failure was too high, no one would take any risks.

- China needed to develop educational systems that continued to foster interest in math and science.

ۦ13. (SBU) Chinese government speakers appeared receptive and largely agreed to the above list of prescriptions. However, they tended to stress the importance of Chinese brands and standards being the mark of Chinese innovation. As one speaker commented, "We hope that the day will come when the label does not read 'Made in China' but 'Created in China.'"

ۦ14. (SBU) Comment: Innovation -- or self-innovation -- has clearly been identified as the next necessary step in China's economic development strategy. While the mission is clear, China still faces enormous systemic economic, legal, educational and social barriers to create an innovation-friendly environment. JARRETT














VZCZCXYZ0000 PP RUEHWEB

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UNCLAS STATE 012095

SIPDIS

E.O. 12958: N/A TAGS: ECIN [Economic Integration and Cooperation], ECPS [Communications and Postal Systems], EINT [Economic and Commercial Internet], MARR [Military and Defense Arrangements], MCAP [Military Capabilities], PREL [External Political Relations], XF [Middle East] SUBJECT: GULF REGION COMMUNICATIONS CONFERENCE 2010 UPDATE

REF: 09 STATE 122229

ۦ1. This is an action request. See paragraph 6.

ۦ2. SUMMARY. Reftel announced a by-invitation-only Gulf Region Communications Conference (GRCC) in Amman, Jordan, 21-23 February 2010, co-hosted by United States Central Command (USCENTCOM) and the Jordanian Armed Forces (JAF). Reftel requested posts deliver a hold-the-date request to regional civilian and/or government attendees pending release of formal invitations. A separate notification was distributed to military attendees through military channels. On 4 February 2010, USCENTCOM forwarded to posts, in care of the security assistance offices, hard copy and electronic versions of the formal GRCC invitations, along with RSVP registration information and conference agenda, for delivery to attendees. Invitations are co-signed by Commander, USCENTCOM and by Chairman of the Joint Chiefs of Staff, JAF. This cable requests posts deliver invitations and an update notification to regional civilian and/or government attendees to further highlight the conference and encourage participation. In order to ensure timely delivery of invitations, please deliver update notifications based on receipt of, and in conjunction with, the electronic invitations, and forward hard copy versions when they arrive. Draft update notification language is provided in paragraph ۦ6. END SUMMARY

ۦ3. For reference, the following is the text for USCENTCOM's half of the formal joint invitation.

Dear Mr. Communications Minister,

On behalf of United States Central Command, I am pleased to invite you to attend the 2010 Gulf Region Communications Conference in Amman, Jordan during 21-23 February 2010.

The conference follows last year's inaugural conference in Bahrain. Again, our intent is to gather regional communications representatives to collaborate on topics of mutual interest in a Regional forum. Ministers of communications, communications regulatory commissioners, and senior military communicators from each of eleven Gulf Region states are invited to participate. Also, senior United States communications representatives from the federal, military, and private sectors are invited. Regional private sector representatives will also be invited.

Conference participants will be able to address regional communications capabilities and concerns and discuss opportunities to support regional stability and security efforts. The enclosed conference agenda is provided for your information.

We would be honored to have you join us. Mr. John Simpson, the Central Command point of contact (813-827-3931, simpsoja@centcom.mil), will accept replies. A detailed conference information packet will be sent separately.

With warm regards,

DAVID H. PETRAEUS General, U.S. Army Commander, United States Central Command

ۦ4. Also for reference, the following is the text for JAF's half of the formal joint invitation.

Dear Honorable Minister,

On behalf of the Hashemite Kingdom of Jordan, I am pleased to invite you to attend the 2010 Gulf Region Communications Conference (GRCC) in Amman, Jordan during 21-23 February 2010.

We believe last year's conference in Bahrain was a great success, and we are looking forward to hosting distinguished communicators within the Kingdom of Jordan.

This next GRCC will enable us, as partners, to continue our examination and discussion of the Region's most significant communications concerns. We are hopeful that this forum and its actions will lead to improved capabilities, stability, and security within the Gulf Nations and across the Region.

Communications ministers and regulatory commissioners, and senior military communicators from each of eleven Gulf Region states are invited to participate. Also, senior United States communications representatives from the federal, military, and private sectors are invited. Representatives of the Gulf Region's private sector will also be invited. The enclosed conference agenda is provided for your information.

We would be honored to have you join us in the Hashemite Kingdom of Jordan.

With utmost respect,

General Khaled J. Al-Sarayreh Chairman Of The Joint Chiefs Of Staff Jordan Armed Forces

ۦ5. The agenda's structure and content reflect extensive collaboration with JAF, including integration of JAF-recommended panel discussions. Each participating nation will be given one speaking part (seat) on each panel and one speaking part (five minute presentation) during closing remarks. All attendees will be invited to participate in roundtable discussions. For reference, the GRCC Agenda follows:

21-23 February 2010 Grand Hyatt Hotel Amman, Hashemite Kingdom of Jordan

Sunday, 21 February

Arrival of conference participants and registration at Grand Hyatt Hotel, Amman, Jordan, Telephone: 962-6-456-1234

1830-2000 RECEPTION (Hotel Location TBD) - For ministers and distinguished visitors (DVs) HOST: U.S. Central Command (USCENTCOM) ATTIRE/GENTLEMEN: Business/National Dress ATTIRE/LADIES: Business (dress, pants outfit)/National Dress

Monday, 22 February

ATTIRE/GENTLEMEN: Business/National Dress/Class A Uniform ATTIRE/LADIES: Business (dress, pants outfit)/National Dress/Class A Uniform

0800-0850 NO-HOST BREAKFAST

0900-0905 CONFERENCE WELCOME (Hotel Grand Ballroom) - Brigadier General Ghazi Salem Salman al-Jobor, Director of the Special Communications Commission, Jordan Ministry of Defense

0905-0910 TRANSLATION EQUIPMENT FAMILIARIZATION

0910-0930 CONFERENCE OPENING REMARKS - USCENTCOM and Kingdom of Jordan Representatives (TBD)

0930-1000 PRESENTATION 1 - His Excellency Marwan Juma, Jordan Minister of Information and Communications Technology TOPIC: Sector Policy--Mobile Communications, Fixed Services, and Regional Connectivity

1000-1030 PRESENTATION 2 - Jordan Telecommunications Regulatory Commission TOPIC: Regulation of Telecommunications

1030-1045 BREAK

1045-1145 PRESENTATION 3 - Mr. Craig Mundie, Chief Research and Strategy Officer, Microsoft Corporation, United States TOPIC: Cloud Computing

1145-1245 PANEL DISCUSSION 1 - Industry/Government Representatives TOPIC: Implementing Cloud Computing Solutions to Information Exchange Challenges

1245-1345 LUNCH (Hotel Restaurant TBD) - For ministers and DVs HOST: Jordan Ministry of Information and Communications Technology

1400-1415 GROUP PHOTO SESSION (Hotel Location TBD)

1415-1515 ROUNDTABLE 1 - Roundtable Moderator, TBD TOPIC: Policy and Regulation Perspective--Improving Telecommunications across the Region and across the Commercial, Government, and Military Sectors

1515-1535 PRESENTATION 4A - Brigadier General Ghazi Salem Salman al-Jobor, Jordan Ministry of Defense TOPIC: Mobile Communications in Support of Relief Operations

1535-1555 PRESENTATION 4B - Brigadier General Mowafaq Assaf, Royal Jordanian Air Force TOPIC: Fiber Infrastructure in Support of Government and Civilian Agencies

1555-1655 PANEL DISCUSSION 2 - Military Communicators TOPIC: Mobile, Fixed, and Fiber Communications

1655-1830 FREE TIME

1830-1900 COCKTAILS (Hotel Location TBD) - For ministers and DVs HOST: USCENTCOM ATTIRE/GENTLEMEN: Business/National Dress ATTIRE/LADIES: Business (dress, pants outfit)/National Dress

1900-2100 DINNER (Hotel Location TBD) - For ministers and DVs HOST: Jordan Telecommunications Regulatory Commission ATTIRE/GENTLEMEN: Business/National Dress ATTIRE/LADIES: Business (dress, pants outfit)/National Dress

Tuesday, 23 February

ATTIRE/GENTLEMEN: Business/National Dress/Class A Uniform ATTIRE/LADIES: Business (dress, pants outfit)/National Dress/Class A Uniform

0800-0850 NO-HOST BREAKFAST

0900-0915 ADMINISTRATIVE REMARKS (Hotel Grand Ballroom) - Brigadier General Ghazi

0915-0945 PRESENTATION 5 - Lieutenant General Carroll F. Pollett, United States Army, Director, Defense Information Systems Agency TOPIC: Synchronizing Commercial, Government, and Military Communications Priorities in the United States

0945-1015 PRESENTATION 6 - Mr Sami Smeirat, Chief Executive Officer, Orange Company, Jordan TOPIC: Regional Reach

1015-1030 BREAK

1030-1130 ROUNDTABLE 2 - Roundtable Moderator TOPIC: Synchronizing Wireless Challenges and Potential Solutions

1130-1200 PRESENTATION 7 - Mr. Nidal Qanadilo, Investment Manager, Jordan Ministry of Information and Communications Technology TOPIC: Fiber Communications in Support of E-learning, E-government, and Rural Areas

1200-1300 LUNCH (Hotel Restaurant TBD) - For ministers and DVs HOST: USCENTCOM

1345-1415 ROUNDTABLE 3 - Roundtable Moderator TOPIC: Regional Fiber Backbone Solutions to Civilian, Government and Military Challenges

1415-1445 ROUNDTABLE 4 - Brigadier General Donahue, Roundtable Moderator TOPIC: 2010 Conference Action Items and 2011 Conference Theme and Topics

1445-1500 BREAK

COUNTRY REMARKS 1500-1510, Kingdom of Bahrain 1510-1520, Arab Republic of Egypt 1520-1530, Republic of Iraq 1530-1540, State of Kuwait 1540-1550, Republic of Lebanon 1550-1600, Sultanate of Oman 1600-1610, State of Qatar 1610-1620, Kingdom of Saudi Arabia 1620-1630, United Arab Emirates 1630-1640, Republic of Yemen

1640-1700 CLOSING REMARKS - USCENTCOM and Jordan Representatives TBD

1700 CONFERENCE CONCLUDES

ۦ6. Action Request: Washington agencies request posts ensure delivery of invitations and deliver the following update notification regarding GRCC 2010 to the appropriate regional civilian and/or government attendees by 8 February 2010. Please notify the USCENTCOM and State POCs in paragraph 7 on completion of action by 10 February 2010. Email replies are acceptable.

Dear (Embassies, please address invitations to appropriate individuals listed),

ABU DHABI: -- His Excellency Muhammad bin Ahmad Alqamzi, Chairman Telecommunications Regulatory Authority -- His Excellency Mohamed Nassar Al Ghanim, Director General and Board Member Telecommunications Regulatory Authority

BAGHDAD: -- His Excellency Farooq Abdulqadir Abdulrahman, Minister of Communications -- Barhan Shawi Al-Tamimi, DG, Communications & Media Commission -- His Excellency Mazin Hashim Al-Haboubi, CEO Deputy for Administrative Affairs

BEIRUT: -- His Excellency Mr. Charbel Nahas, Minister of Telecommunications -- Dr. Kamal S. Shehadi, Chairman & Chief Executive Officer of Telecommunications Regulatory Agency

CAIRO: -- His Excellency Dr. Tarek Kamel, Minister of Communications and Information Technology -- Dr. Amr Badawy, Executive President of National Telecommunications Regulatory Authority

DOHA: -- His Excellency Dr. Hessa Al-Jaber, Secretary General Supreme Council of Information & Communications Technology -- Mister William Fagan, Director, Supreme Council of Information & Communications Technology

KUWAIT: -- Dr. Mohammed Mohsen Al-Busairi, Minister of Communications

MANAMA: -- Dr. Mohammed Al Amer, Chairman and Acting General Director, Telecommunications Regulatory Authority

MUSCAT: -- His Excellency Dr. Khamis bin Mubarak al Alawi, Minister of Transportation and Communications -- His Excellency Mohammed Nasser Al-Khusaibi, Chairman, Telecommunications Regulatory Authority

RIYADH: -- Mister Mohammed Jameel bin Ahmed Mulla, Minister of Communications and Information Technology -- Dr. Abdulrahman Al-Jafari, Governor Communications and Information Technology Commission

SANAA: -- His Excellency Kamal Al-Jabri, Minister of Telecommunications & Information Technology

United States Central Command and the Jordanian Armed Forces will co-host the by-invitation-only Gulf Region Communications Conference (GRCC) 2010 in Amman, Jordan on 21-23 February 2010. Formal invitations have been distributed to you separately along with details regarding RSVPs and registration and the conference agenda. GRCC 2010 will continue GRCC 2009 multilateral engagement on regional telecommunications and information sharing capabilities and will foster cooperation among our respective entities in order to overcome challenges, to include crisis response and/or disaster relief missions.

GRCC 2010 presentations and discussions support a theme of Synchronizing Commercial, Government and Military Communications Priorities. GRCC 2010 adds panel discussions to the GRCC 2009 conference format of presentations and roundtables. Each nation attending the conference will be given one seat for a national representative on each panel. As with GRCC 2009, roundtable discussions will be open to participation by all attendees. Each nation attending the conference will also be given five minutes for one national representative to present closing remarks. Please identify to the conference co-hosts as soon as possible those individuals who will represent (post, please insert here your nation) on each panel and present closing remarks.

I encourage you to attend the conference.

Sincerely, (DoS originator name) (DoS originator title) U.S. Department of State

ۦ7. CENTCOM point of contact for the conference:

Jim Ramirez DAFC U.S. Central Command Deputy, Strategic C4 Architecture Programs and Policy Division * (813) 827-5816 DSN 651-5816 * ramirejs@centcom.mil * ramirejs@centcom.smil.mil

State Department points of contact for the conference:

COL Dave Huggins Senior Military Advisor, Near Eastern Affairs Bureau * (202) 647-3945 * HugginsWD@state.sgov.gov

Steve Simpson Communications and Information Policy / Middle East Energy, Economic, and Business Affairs * (202) 647-5306 * SimpsonSC@state.gov * SimpsonSC@state.sgov.gov CLINTON







Yes, that latter cable is signed by Clinton. Interestingly enough, Mundie is doing politics.

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