DIY PR

Any entrepreneur can run a snazzy advertising campaign, if he or she is willing to pay for it. The trick is to get that kind of exposure without breaking the bank.

Such is the allure of "public relations"--the discipline of shedding a benevolent light on a person, company or cause, mainly by tapping the news media. The press is a powerful force: Clearly, Amazon.com (nasdaq: AMZN - news - people ) and Google (nasdaq: GOOG - news - people ) offer great services, but appearing in some 13,000 news articles around the world in the last 30 days helps get the word out too. And depending on the outlet and nature of the story, PR offers a potentially huge benefit that advertising does not: third-party approval.

"PR creates enough awareness that other people provide referrals," says Ed Cafasso, a managing director at Manning Selvage & Lee, a global PR firm. "PR creates that kind of credibility."

In Pictures: Five Do-It-Yourself PR Tactics

There are now some 200,000 PR "specialists" in the U.S. (not including those that are self-employed), according to the Department of Labor. Come to Manhattan and you might trip over one as you stroll down Fifth Avenue. Sadly, most aren't very good at what they do (ask any journalist), but the good ones serve a vital function and can take your business to greater heights--or at least generate some nice buzz.

The best place to start looking for help is one of the 109 chapters of the Public Relations Society of America (PRSA) at www.prsa.org. The local Chamber of Commerce may keep tabs on nearby talent too.

Once you've narrowed the field, vet the survivors. Push them to offer a tangible strategy and try to estimate their ability to execute.

Some key questions: Which publications should I be targeting? What storyline will gain the most traction with each outlet? Can I speak with other clients? Who are some of the reporters with whom you have established relationships and might I be able to speak with them? (If that last one sounds implausible, apparently it's not--Forbes.com spoke with six PR professionals who offered that same advice and claimed to comply with such requests.)

PR types often promise more than they can deliver, so manage your expectations. Some firms trot out senior executives at initial meetings only to stick less-experienced staffers on smaller accounts, says Giovanni Rodriguez, co-founder and principal at Hubbub PR, which caters to start-up companies in Silicon Valley, Calif.

Lesson: Make sure you meet the people who will be doing the actual work. If you need further comfort, look for the Accredited in Public Relations mark, or APR, meaning that the person passed a tricky exam administered by the Universal Accreditation Board.

When it's time to talk money, request a menu of services and prices. Average monthly fees for an established U.S. shop are about $10,000, according to a recent survey of 100 firms around the country with revenues over $3 million. Some firms charge by the hour, and still others offer a la carte services--say, for running a special event or triaging a corporate snafu. Rodriguez charges start-ups a monthly retainer from $8,000 to $15,000. That's not chump change, but it's far less than many print ad campaigns.

Before you write any checks, set some performance yardsticks. While PR remains a squishy science, there are ways to loosely measure progress. The most common is the number of media references to your company in a given month. But there are subtler metrics, too, such as how many of your "core messages" were expressed in each article.

And remember: No matter how many times your company appears in the press, always ask your customers--either in person or through your Web site--how they heard about you. PR is an ongoing effort, and it needs constant tweaking.

"If you are not getting what you need from your agency, say something," says Julie Adrian, head of the Chandler Chicco Agency's Los Angeles unit. "Especially with small businesses, you have a finite bit of money to spend. We understand that it’s hard to give a chunk of that money to something that can seem so intangible."

Rather save the money and handle your own PR? For starters, you'll need a press kit. Most of that material will end up in reporters' garbage bins, but a rare few might grab their attention.

The kit should include a clear description of your business and its goals, as well as a backgrounder on you--complete with compelling, relevant anecdotes worthy of a yarn. It should also contain copies of any media coverage you have received, testimonials from important customers and awards you have won. If there is an important technical aspect to your product, include an easy-to-follow description of how it works and why anyone needs it. (Note: Avoid any and all jargon; it will hasten your kit's path to the circular file.)

For better or worse, PR has made its way into many college curricula. Mine the local schools for eager interns looking to pad their résumés at rock-bottom rates. The smartest can deal with the press, hunt for sponsorship opportunities (such as local events) and even develop a company blog to attract customers.

Applying for an award never hurts, either. Like positive news stories, awards confer credibility--and there are sponsors aplenty, including the Better Business Bureau, your local Chamber of Commerce, trade groups and even trade and mainstream publications. Beware, though: Most judges are looking for any reason to cull the field of applicants quickly, so mind the application rules unless you want to be summarily disqualified.

Come to think of it, that goes for dealing with stubborn journalists too.

In Pictures: Five Do-It-Yourself PR Tactics

From Oxford to Silicon Valley, part four

In my previous piece, I wrote about the virtues of San Francisco as a place to live.

Kulveer was keen to punch above his weight at eBay Live

It is, of course, typical that since then I've seen very little of it.

• Kulveer's blog
• Boso.com
• Auctomatic

We've spent the last six weeks pretty much locked up in our apartment working.

June started off with us preparing for eBay Live in Boston, the online auction company's annual conference.

We paid $3,000 for a tiny 10ft by 10ft (3m by 3m) stand, and spent three days intensely talking to potential customers.

It was tiring, but immensely useful.

We met hundreds of powersellers (sellers who do more than $1,000 (£500) of business a month), and learned first hand what it was that they wanted us to build.

Considering we had only a fraction of our competitors' manpower and had spent one-tenth of their budget, we were determined to punch above our weight and get ourselves a decent amount of attention.

The good news is that we were definitely noticed.

Noticed at eBay

We designed and printed off a few hundred t-shirts in San Francisco and had them shipped to our investor Paul Graham's house in Boston at the last minute.

Once they arrived on the morning of the conference, Patrick left to pick them up, only for no-one to be home when he turned up.

After waiting around for a few minutes and facing the prospect of losing hours of valuable time, Patrick saw the boxes lying in the hallway and used his initiative to simply walk in and bring them back, after finding the door unlocked.

Another problem we faced before the conference was the extreme time pressure of buying and setting up our servers.

Since our bank account is in the UK, it took too long for the money to transfer for payment and we were faced with the prospect of having no website to show people.

Step in Paul Buchheit at the last minute, one of our investors and the creator of Gmail, who kindly let us order a few thousand dollars worth of servers on his credit card!

That was a big relief.

'I like being on top'

Back in Boston, we created a bit of a stir with the t-shirts.

The tag line we chose to adopt was "I like being on top", with "of my auctions" as the punch-line on the back.

The Auctomatic stand had plenty of visitors

We were slightly hesitant about the possible response, but it was fine, they loved it.

We heard reports of sightings of our t-shirts at bars and across the city in Boston, which was cool.

Eventually, our competitors had to walk over and find out what all the fuss was about for themselves.

Other highlights included giving a demonstration to the President of Paypal, Rajiv Dutta, who loved our product, as well as when a powerseller was so moved by our demo that she felt compelled to hug Patrick.

As an aside, it was really interesting to see first-hand the cultural phenomenon that is eBay.

We met retired couples who had new-found independence, teenagers who were making a killing selling fashion-wear, professional resellers, and lots of people who were eager to start businesses all because of eBay.

We hear a lot generally about Americans being entrepreneurial, but this really drilled it home.

All of which makes us even more impatient to launch the tool to the general public.

Right now we are testing it to make sure everything works reliably.

We are conscious that since we are dealing with people's money, we have to be extra careful.

The hard bit that we have to work on is ensuring that the application interface is easy to use.

If we make things complex or clunky then people will be put off and so we are working closely with some powersellers to make sure it's all intuitive.

Indeed, it's fair to say that a measure of our success will be how easy it is to use.

On this point, I must add that our "locking ourselves away" approach may have been counter-productive.

After being hermit-like for six weeks, we ended up visiting one of our fellow Y Combinator entrepreneurs, Robby Walker, to pick up some stuff we had forgotten in Boston that he brought back for us.

Keep talking

We ended up talking for a while and pretty quickly learned a whole bunch of stuff that could have helped with our development and with the ongoing talks with investors.

Robby's company Zenter, which was funded at the same time as our's in January, has since been bought by Google, and as such, his advice was very valuable.

It then occurred to me that although we had moved to the other side of the world to benefit from "network effects", we had inadvertently been missing out because we'd stopped talking to our fellow entrepreneurs.

We quickly learned our lesson and now make sure we talk to those who have experience of what we are trying to do.

In other news, we also received a further bit of angel funding from Chris Sacca, Google's Head of Special Initiatives.

We've known Chris since he visited Oxford as part of the "Silicon Valley comes to Oxford" event last year and it was fantastic news that he wanted to invest.

This makes us comfortable in terms of capital right now, so our focus is primarily on launching our application and getting users.

It's an exciting, if slightly nerve-racking time.

Cool, casual and environmentally friendly

President Hu's tieless look was widely reported by China's media

When Chinese President Hu Jintao gave a keynote speech this week, he ditched his usual suit and tie and wore a simple shirt, open at the collar. Read original article

A few days later, politicians attending a regular parliamentary meeting did the same thing - formal attire was replaced by shirt sleeves for the first time.

This move to casual wear is not accidental.

It is aimed at encouraging Chinese to wear fewer clothes so they can turn down air conditioning and save energy.

An official told China's state-controlled Xinhua News Agency that it is usually more appropriate to wear a suit and tie at parliamentary meetings.

"However, after discussion, we agreed that [we] should act as a model to save China's limited energy resources," he explained.

Style leader

Of course, politicians across the world choose their clothes to fit the occasion, but in China it is perhaps more important as there are very few unauthorised images of the country's leaders.

It is hard to imagine the Chinese media publishing a photograph of, say, Hu Jintao during his university days, as happened with Britain's former Prime Minister Tony Blair.

Chinese leaders have become much more skilful at using the media, and clothes send important signals Joseph Cheng Hong Kong's City University

China's previous president, Jiang Zemin, was apparently furious when a photograph of him changing his glasses during a speech appeared in a national newspaper.

He complained that readers could have interpreted the picture as meaning China was changing its political direction.

President Hu has been just as keen to keep up appearances.

When meeting foreign dignitaries or travelling abroad, he usually dons a sharp suit, crisp white shirt and well-knotted tie.

At meetings with the country's military leaders, however, Hu chooses the green military uniform of the People's Liberation Army, albeit without insignia.

And at less formal occasions, the Chinese president is shown in casual clothes.

President Hu wears his uniform in meetings with military chiefs

Other leaders follow suit.

Premier Wen Jiabao often visits rural areas, and when he does he usually wears short-sleeved shirts and casual trousers, presumably to appear less daunting to the farmers he meets.

"Chinese leaders have become much more skilful at using the media, and clothes send important signals," Joseph Cheng, a politics professor at Hong Kong's City University, says.

He believes military leaders really do appreciate it when Hu, who is head of China's armed forces, appears before them in uniform.

And officials at all levels across China take their sartorial cues from senior leaders in Beijing.

However, there is one style of clothing that you will not see President Hu or any other leader wearing too often these days - the Mao suit.

That symbol of communist egalitarianism does not really seem suitable now that China has ditched most of Mao's policies.

Will China now clean up its BVI shelf company dirty laundry?

The Peoples' Republic of China has attained full membership in the Financial Action Task Force [FATF] this week. This is a good sign that AML compliance in China has improved, but the real test is yet to come. There are literally hundreds of thousands of British Virgin Islands companies owned by PRC businessmen, as well as foreigners doing business in the PRC. Whilst we approve of prudent tax avoidance, rampant tax evasion and money laundering techniques that utilise BVI companies to accomplish these illicit goals are a sign that regulation and control of offshore companies by China is long overdue. Read original article.


Simply put, the huge and lucrative industry of BVI shelf company corporate service providers located in Hong Kong needs to be identified and strictly regulated. Since one can obtain a turn-key BVI company for only a mere US$1190, every garden-variety illegal transfer pricing and trade-based money laundering thought conjured up by a Chinese businessman has an outlet. We cannot deny businessmen the right to buy these companies, so what do we do? We regulate.

There can be reasonable reporting identification controls on companies from suspect tax havens sold to PRC citizens and businesses? is this too radical an idea? if so, look at the alternative; runaway tax evasion. Perhaps the PRC government might want to look at the US bill now pending - I am speaking about the Stop Tax Haven Abuse Act. Why not treat BVI companies as domertic for tax purposes?

This may be heresy, but is there not a strong public policy argument to favour the PRC government's efforts to shut down BVI company money laundering? I, for one, would like to see some radical action to curtail the activities of those totally unregulated Hong Kong corporate service providers. Hopefully, the leaders in Beijing are listening to their experts on money laundering control.

Economic Forecast

The main priority for the ruling Chinese Communist Party (CCP) over the next two years will be to maintain political stability in order to ensure the success of both the 17th party congress, due in late 2007, and the Olympic Games in the capital, Beijing, to be held in August 2008. As the party congress approaches, the president, Hu Jintao, will continue to strengthen his influence through the appointment of allies to important positions. Real GDP growth will slow slightly from 10.7% in 2006 to a forecast 10.5% in 2007 and 9.6% in 2008. The government will continue in its efforts to rebalance the economy, attempting to make growth less dependent on exports and investment while introducing measures to boost consumption. The current-account surplus is forecast to remain huge, equivalent to 10.7% of GDP in 2007 and 9.8% in 2008. Read original article.

Key changes from last update

Political outlook

Huang Ju, China's sixth-ranked leader and a member of the standing committee of the politburo, died in early June. Mr Huang was seen as a member of the Shanghai faction of leaders loyal to the ex-president, Jiang Zemin. His death will give Mr Hu an opportunity to consolidate his power by appointing a replacement more loyal to the current leadership.

Economic policy outlook

In late May the government tripled stamp duty to 0.3% on all share purchases. Although the move had the initial desired effect, with share prices falling by around 13% in the following week, by mid-June the Shanghai Stock Exchange Composite Index was once again at record highs. Despite rising fears of a possible crash, it is belived that the economic impact of a big fall on the stockmarket would be fairly limited.

Economic forecast

The increase in stamp duty will provide the government with a fiscal bonanza. As a result, we have revised down our forecast for the fiscal deficit in 2007 to 0.7% of GDP, from 1.3% previously

Blackberry to go on sale in China

The Blackberry will be available in China from next month

Research in Motion (RIM) has won approval to sell its Blackberry handheld e-mail device in China - the world's largest mobile phone market. Read original article.

The Canadian company said Beijing had given the green light to sell the handsets after an eight-year battle.

The device is expected to be available in shops in the country from August, according to reports, with 5,000 advance orders already received.

The plans come as US regulators investigate the firm's stock options.

In April, the firm announced that an informal internal probe into backdated options approved after RIM's initial public offering in 1997 had become a formal investigation by the Securities and Exchange Commission (SEC).

Backdating can increase the value of the shares to the owner. While it is legal, a company has to fully inform shareholders of the practice and make sure it is properly accounted for.

Demand strong

Despite the investigation, RIM continues to perform strongly as customer demand for the Blackberry continues to grow.

Earnings for the first three months of the year rose 10-fold, soaring to $187m (£94m) from $18.4m a year earlier. Its subscriber base grew by about 1.2 million during the quarter, taking the total number to 9.2 million.

However, industry observers say the product's market share could now be threatened by Apple's much-hyped iPhone, which launched last week and offers phone calls, e-mail, internet access, music and video access.

The firm has linked up with China's biggest mobile phone network China Mobile to launch the Blackberry.

Shanghai plans to build an "eco-city"

It is here on Dongtan Island that Shanghai plans to build a demonstration eco-city which will ultimately house 500,000 people, designed by the UK engineering consultancy firm Arup. Read original article.

Peter Held's enthusiasm for the Dongtan project is infectious

Peter Head, Arup's project director, says that the project can be a model for the world.

• City of Shanghai government
• Tongji University
  
• Arup

"Significant global climate change, environmental issues, water shortages and the need for the use of cleaner and renewable energy demand the creation of a new approach to urban development," he explained in his office in Shanghai.

The eco-city, to be linked to the mainland by an 18-mile long bridge-tunnel which also spans two smaller islands, will initially house between 20,000 and 50,000 people.

The new eco-city will feature a marina

Conventional cars will be banned in the city centre, while the plans include capturing and purifying water, waste management recycling, reducing landfills that damage the environment, and creating combined heat and power systems.

Mr Head says he has been impressed by the speed and determination of the Chinese authorities, who moved at "three times the speed" of Western planning departments.

China's centralised planning system has been behind the extraordinary transformation of Shanghai in the last decade into a Western-style metropolis.

Development boom

Dongtan is just one of nine new towns planned by the city of Shanghai to relieve overcrowding in a city of more than 20 million people.

The Dongtan wetlands are currently an important habitat for birds

Shanghai also plans to relocate much of its shipbuilding industry - the largest in China - on one of these islands, making space for the WorldExpo 2010 site, while providing employment for many of the island's residents.

And it plans to rehouse many of the 650,000 inhabitants of the island in modern housing, to make room for eco-tourism and eco-farming.

But some observers, such as Professor Chen of Tongji University, think that the local planners are more concerned with raising the income and standard of living of the region than ensuring ecological development.

They say that the new ecologically-sound housing developments may not be affordable by locals and could become suburban housing for the rich.

Living standards are still low on Chongming Island

Already many have been purchased by overseas Chinese.

And they are concerned that the development of shipyards, power plants and bridge- tunnel systems may stimulate rather than retard the over-development of the region.

Certainly in a tour of the project run by Shanghai's planners, growth and expansion of this quiet backwater seemed to be the central theme.

Final obstacle

But ultimately, the development of Dongtan Eco-city is dependent not on ecology but politics.

After the rapid development of the master plan for the city, final authorisation of the funds for the project has stalled.

Arup's Peter Head says the problem is that all big projects are now awaiting approval from the new boss of Shanghai, who was only appointed in March, following the sacking of the former Shanghai Chinese communist party chief in October on corruption charges.

With China's high-profile commitment to showing it is serious about tackling environmental issues, it would be surprising if the project did not go through.

But its contribution to global warming is likely to remain controversial.

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EU, China to work on accounting standards decision...

The EU is to work in collaboration with China on the agreement of an accounting standards decision, seeking to ascertain a final decision as to the extent to which Chinese and EU accounting standards are equivalent. Read original article.

The two groups will seek to come to conclusion by mid-2008 in a development that is expected to have tangible benefits for accountancy industry members across Europe and in China alike.

To this end it has been agreed that joint working groups will be established. Previously, a monitoring session on accounting came to the conclusion that China and the EU will continue to cooperate on policy and technical issues.

In addition, the EU has welcomed China's adoption of 39 new accountancy standards in a hope to achieve convergence with International Financial Reporting Standards (IFRS), which have been adopted by the EU.

Should China meet these standards, it would become the fourth country after the US, Japan and Canada to have equivalent accounting standards to the EU, reports Xinhua.

In related news, Israel, though in support of IFRS, could be facing complications in light of current Israeli accounting standards, according to Haaretz.

China sends powerful message on Corruption.

Zheng Xiaoyu was accused of accepting some $850,000 in bribes

The former head of China's State Food and Drug Administration, Zheng Xiaoyu, has been executed for corruption, the state-run Xinhua news agency reports. Read original article.

• China State Food and Drug Administration
  
• Xinhua

He was convicted of taking 6.5m yuan ($850,000; £425,400) in bribes and of dereliction of duty at a trial in May.

The bribes were linked to sub-standard medicines, blamed for several deaths.

China has been criticised over a number of recent cases involving tainted goods, and correspondents say Zheng had become a symbol of the crisis.

Zheng had appealed against his sentence, arguing that it was "too severe" and saying he had confessed his crimes and co-operated with police.

But his appeal, heard in mid-June, was rejected shortly afterwards.

Toxic chemicals

Following Zheng's sacking in 2005, the Chinese government announced an urgent review of about 170,000 medical licences that were awarded during his tenure at the agency.

At a news conference in Beijing on Tuesday the State Food and Drug agency said that its supervision of safety was unsatisfactory, and it vowed to improve matters.

A senior official said Zheng Xiaoyu had "brought shame" on the department, adding that anyone abusing their power would be punished.

CHINESE FOOD SCARES May 2007 China probes reports that contaminated toothpaste was sent to Central America March 2007 Melamine is found in wheat gluten exports from China for use in pet food, prompting a recall of at least 100 pet food brands Nov 2006 A dye farmers fed to ducks to make their eggs look fresher is found to contain cancer-causing properties and 5,000 ducks are culled August 2006 About 40 people in Beijing contract meningitis after eating partially cooked snails at a chain of restaurants

Chinese officials have already acknowledged that the country could face social unrest and a further tarnished image abroad unless improvements are made.

Dozens of people have died in China because of poor quality or fake food and drugs, sparking widespread international fears about the safety of Chinese exports.

Thirteen babies died of malnutrition in 2005 after being fed powdered milk that had no nutritional value.

US inspectors have blamed exported Chinese pet food ingredients, contaminated with melamine, for the deaths of cats and dogs in North America.

And they recently halted shipments of toothpaste from China to investigate reports that they may be contaminated with toxic chemicals.

The BBC's Daniel Griffiths in Beijing says the government is hoping that this execution will show it is getting to grips with the crisis.

But food and drug safety standards vary widely across this vast country and reform is going to be a major challenge, he says.

Youthquake in China

The face of China's "Rare Generation" might look something like Li Yuchun, the 2005 winner of an "American Idol"-type singing competition dubbed, improbably, "Mongolian Cow Sour Yogurt Super Girl's Voice." Read original article.

It wasn't Li Yuchun's voice that drew the largest number of television viewers on record in China. It was her attitude, which was something new. She didn't wear makeup, dressed in baggy, androgynous clothing, sang Western songs -- and romped to victory, with 3.5 million viewers casting mobile-phone text votes for her in the grand finale.

The Chinese fans who cast their votes for Li -- and who still throng her performances -- are members of a new breed in China. In their teens and 20s and making a sharp break from the culture of their parents, the members of China's "youthquake" are ambitious, energetic, modern and individualistic -- at least up to a point. Video: What makes them different?

Democracy? Fine when they are voting for a singing idol, but otherwise a distraction from the main business of life: snagging a great, creative new job. Consumer choice? They have no recollection of the days when navy blue cotton jackets and trousers were the de facto national uniform, or when Coca-Cola and McDonald's weren't available. Read more...

The new generation has its orders - to start inventing.

China has begun to use its own home-grown vaccines in clinics

For China's youngest citizens, it is an eye-popping morning. It is jab day at a clinic in Beijing. Read original article.

Parents line up in the corridor, each holding onto a worried-looking child. Behind a curtain, there is a nurse wearing a face mask. Beside the nurse is a pile of syringes.

One boy, Lu Junran, starts to shriek. His father holds him and strokes his hair, and the nurse gives the injection.

The vaccines this clinic uses have been developed by the Chinese company Sinovac.

China hopes that companies like Sinovac can help the country take an important step - from "Made in China" to "Invented in China".

China does not want to make other people's products forever. It plans to start inventing products of its own.

After all, that is what China used to do.

China has a strong local talent pool. People are well educated and very passionate about technology and innovation Yimin Zhang Intel

China is the country that gave the world gunpowder, paper and the compass.

But in recent centuries, its inventions have dried up. Now it wants to start innovating again.

Sinovac's headquarters is in an industrial park on the outskirts of Beijing. Photos in the lobby show the company's scientists taking President Hu Jintao around the laboratories.

In its labs, Sinovac scientists are trying to pioneer a bird flu vaccine - something that no other country has managed to do.

"We can't just be a factory for the world," says Sinovac's boss, Yin Weidong. "There's a huge market out there. We have to start designing our own products."

Mind-bending problems

Since 1999, Chinese spending on research and development has grown by 20% every year.

Hu Jintao has set a research and development target of 2.5% of gross domestic product by 2020.

The country's spending is now starting to have a global impact.

Young Chinese are increasingly involved in technological innovation

The Organisation for Economic Co-operation and Development (OECD) says that China has now overtaken Japan's research and development spending.

In seven years time, China may also overtake the world leader, the United States.

So multinational firms are now betting that the long-term future of innovation may lie in China.

Hundreds of companies have opened research centres in Beijing and Shanghai.

Intel has its own compound in a skyscraper in Beijing, where dozens of young researchers doodle on notepads or write incomprehensible programmes onto their computer screens.

Intel's strategy is simple - sign up the best young brains in China and then get them to have a go at some mind-bending problems, such as face processing imaging, machinery application on video retrieval and ultra-mobile devices.

"We believe that China has great potential in innovation," says Yimin Zhang, who runs Intel's Application Research Lab.

"China has a strong local talent pool. People are well educated and very passionate about technology and innovation."

And there are more and more of them. Every year more than 20,000 Chinese students obtain their doctorates. Some choose to work abroad, but many are now being encouraged to stay in China.

This new generation has its orders - to start inventing.

That is quite an ambition for a country built on repetition, copying and obedience.

FBI and Chinese Authorities crack down on counterfeit

The F.B.I. said Tuesday that a joint effort with the Chinese authorities had led to the arrest of 25 people and the seizing of more than $500 million worth of counterfeit Microsoft and Symantec software that was being made in China and distributed worldwide. Read original article.

The arrests, according to industry executives, represented the most significant crackdown on software piracy.

“This is the biggest software counterfeiting organization we have ever seen by far,” Microsoft’s associate general counsel for worldwide piracy and counterfeiting issues, David Finn, said. “This is a real milestone.”

The arrests and seizures came at a time American politicians and executives are pressing China to take strong measures to curb software piracy.

The F.B.I. characterized the operation, code-named Summer Solstice and begun in 2005, as an “unprecedented cooperative effort” with China’s public security ministry. The bureau said it included multiple investigations that are continuing.

In the last couple of weeks, the operation led to the seizing by the Chinese government of 290,000 counterfeit discs and certificates of authenticity. The F.B.I. and the Chinese identified criminal organizations producing and distributing counterfeit software in both Shanghai and Shenzhen.

The Los Angeles field office of the F.B.I. conducted two dozen searches of suspected distributors of pirated software, seizing $2 million in software and $700,000 in other assets.

Microsoft’s 75-member antipiracy team had been tracking a Chinese syndicate since May 2001, when counterfeit discs of the Windows Millennium operating system were found in Southern California. Since the investigation began, Microsoft investigators have found 55,000 discs.

The Chinese syndicate thought to have been involved had 30 production lines. Based on its examination of the discs, Microsoft said a conservative estimate of the value of the software sold by the criminal group was $2 billion.

The illegal software included versions of Windows Vista, Office 2007, Office 2003, Windows XP and Windows Server, and it was produced in English, German, Italian, Chinese, Korean, Spanish, Dutch and Croatian.

Symantec is a leading publisher of security, antivirus and utility software.

Microsoft, in gathering evidence it later handed over to the F.B.I. and to Chinese authorities, said more than 1,000 people had notified the company and sent in counterfeit discs.

The suspects did not produce cheap copies, according to Microsoft. “This was a deluxe counterfeit software operation of a very high level,” Mr. Finn said. The discs were often sold at or near the price of legitimate software, he said, adding, “We’re not talking about selling these discs for a $1 on street corners.”

The consumers who sent in the pirated discs were apparently unaware they had purchased illegal software until a notification popped up on their screens — an antipiracy feature the company calls Microsoft Genuine Advantage. Mostly, Mr. Finn said, they were irate they had been sold pirated software. “We’ve never seen so much involvement by individual customers in the evidence-building process,” he said.

One group of criminal suspects was headed by Ma Kei Pei of Shanghai, who, the F.B.I., said was an experienced software pirate. In 2003, Mr. Ma was indicted in New York on criminal copyright and trademark violations in the production and distribution of counterfeit Microsoft products. He fled the United States and returned to China, where he continued as a big-time counterfeiter, according to the bureau.

This time, Mr. Ma “created and directed an international organization” to produce and sell counterfeit Symantec software, the F.B.I. said.

Mr. Ma and 10 accused co-conspirators were arrested, the F.B.I. said, and Chinese authorities froze $500,000 in his bank accounts and seized five properties he owned. The maximum sentence for software piracy in China is about seven years.

The bureau said it and the Chinese authorities had identified at least 14 major makers and distributors in Shenzhen of counterfeit Microsoft software.

China did not issue a separate statement. But the F.B.I. said that Chinese officials had seized more than 47,000 counterfeit Microsoft discs, and had arrested Wang Wenhua, Che Tingfeng and 12 others accused as conspirators.

The piracy ring, Mr. Finn said, had been the leading producer of high-grade counterfeit Microsoft products in recent years. As a result of the arrests, he said, “I expect to see a significant and appreciable effect on the amount of high-quality counterfeit software there is in the world.”

Chinese blogger held over stock tips

By Geoff Dyer in Shanghai

China’s proliferation of unregulated investment advice companies and private “hedge funds” could be under threat after the arrest of a blogger whose online stock tips made his site one of the country’s most popular.

Wang Xiujie, 35, was arrested in the north-eastern city of Changchun after an investigation into his unauthorised investment consulting business, Xinhua news agency reported. No charges have yet been filed.

The popularity of Mr Wang’s blog turned him into one of the phenomena of China’s recent stock market frenzy, in which millions of new investors opened share trading accounts. His blog is one of many unlicensed investment advice and fund management operations to have sprung up over the past 18 months and which have begun to attract the attention of regulators.

Mr Wang set up his stock-tip site in 2005 under the name Daitou Dage 777 – which means “senior big brother” and is the name of a famous kung fu character. The site claims to have received more than 33m hits and local media in May branded it China’s most popular blog, eclipsing that of a popular actress.

Mr Wang, who claims to have been a stockbroker in the 1990s, also used personal messaging services to deliver share tips. Chinese media reports have said he made Rmb10m ($1.3m) for his investment advice.

As part of the explosion in informal investment companies, many investment “studios” have sprung up to offer stock tips for a fee to new investors. Meanwhile, hundreds of private investment funds – referred to as hedge funds in China – have been established to trade clients’ money.

Some of these unlicensed funds are run by professional investors, others by relative newcomers investing their friends’ and families’ savings. By some estimates, private funds now have $50bn under management – roughly a third of the formal sector.

Government officials have been debating for months which of these activities to clamp down on and which to allow.

Neither the China Securities and Regulatory Commission, the stock market regulator, nor Jilin province police would comment on Mr Wang’s arrest.

Lawyers said it was unclear whether his detention was part of a broader regulatory move against informal investment companies.

Song Yixin, a partner at Wenda law firm in Shanghai, said the case “could be viewed as a benchmark in the industry, with the government using it as a warning to other unlicensed activities”.