Gao calmly rattled off a fairly staggering list of statistics on how rapidly the phone system there is growing - half to three-quarters of a million lines added per year for the foreseeable future. All of their local exchanges are webbed together with fiber, and they're running fiber down the coast toward Shenzhen. They're setting up packet-switching networks for their customers who want them - banks, import/export houses, and the like. The cellular and CT2 networks are also growing as rapidly as technology allows. He buys scads of high-bandwidth technology from the West and is actually trying to set up a sort of clearinghouse near Shanghai where Western manufacturers could gain access to the potentially stupendous Chinese market through a single point, instead of having to traffic separately with each regional PTA.

Gao is baffled by the fact that the US makes all the most advanced technology, but our government won't allow him to buy it. He asked me to explain that fact. I didn't suppose that haranguing him about human rights would get me anywhere, so

I mumbled some kind of rambling shit about politics.

He explained to me, through his interpreter, that the slogan of Shanghai PTA is "destroy the users on the waiting list." Indeed, it's the job of people like Gao to extend the net into every cranny of the society, making sure everyone gets wired. When nobody had phones, he says, nobody really missed them; thevery few people who had them in their homes viewed them primarily as a symbol of status and power. Now, 61 percent of his customers are residential, everyone views it as a basic necessity of life, and Gao's company has to provide them with more services, like direct dial, pagers, and so on. Cellphones, he said, are so expensive that they're only used by businessmen and high-ranking officials. But the officials are uneasy with the whole concept because they have to answer the phone themselves, which is seen as a menial chore. I told him that in

Hong Kong, businessmen walk down the streets followed at a respectful distance by walking receptionists who carry the phones for them. Gao thought that was pretty funny.

In one Chinese city, a woman spends all day running a sidewalk stand and keeping one eye on a construction project across the street. The construction project is backed by a couple of people who were running a software counterfeiting operation to the tune of some tens of millions of dollars until they got busted by Microsoft. They hid their money and have been sinking it into the real estate project. Microsoft is paying the woman a lot of money (by the standards of a Chinese sidewalk vendor) to watch the site and keep track of who comes and goes. She has a camera in her stand, and if the software pirates ever show up there and she takes a picture of them, she gets a whopping bonus, plus a free trip to the United States to testify.

Microsoft runs an office in Hong Kong that is devoted to the miserable task of trying to stop software piracy in Asia. In addition to running their undercover operation in the sidewalk stand, they are targeting a number of operations in other countries, which probably provides a foretaste of what's going to happen in mainland China a few years down the road.

Most East Asian countries have sort of a stolen intellectual property shopping mall where people sit all day in front of cheap computers swapping disks, copying the software while you wait - the vaunted just-in-time delivery system. After a few of these got busted, many switched to a networked approach.

One guy in Taiwan is selling a set of 7 CD-ROMs containing hundreds of pirated programs. He has no known name or address, just a pager.

Taiwan, the most technologically advanced part of Greater

China, makes a lot of PCs, all of which need system software, so there the name of the game is counterfeiting, not pirating.

MS-DOS and Windows are, naturally, the main targets.

Microsoft tried to make the counterfeiters' job harder by sealing their packages with holograms, but that didn't stop the

Taiwanese - they made a deal with the Reflective Materials

Institute at, you guessed it, Shenzhen University, which cranked out hundreds of thousands of counterfeit holograms for them.

It often seems that, from the point of view of many entrepreneurial souls in East Asia, the West's tight-assed legal system and penchant for ethical dithering have left many inviting niches to fill. Perhaps this explains their compulsion to enter such perfectly sensible fields as driftnet fishing, making medicines from body parts of nearly extinct species, creative toxic waste disposal, and, above all, the wholesale, organized theft of intellectual property. It's not just software, either -

Indonesia has bootleg publishers who crank out counterfeit bestsellers, and even Hong Kong's Saturday morning TV clown wears a purloined Ronald McDonald outfit.

This has a lot to do with the collective Chinese approach to technology. The Chinese were born to hack. A billion of them jammed together have created the world's most efficient system for honing and assimilating new tech (they actually view

Americans as being somewhat backward and slow to accept new ideas - the Chinese are considered, as Bill Newton put it,

"not so much early adopters as rapid adopters"). As soon as someone comes up with a new idea, all the neighbors know about it, and through an exponential process that you don't have to be a math major to understand, a billion people know about it a week later. They start tinkering with it, applying it to slightly different problems, trying to eke out hair-thin improvements, and the improvements propagate across the country until everyone's doing things the same way - which also happens to be the simplest and most efficient way. The infrastructure of day-to-day life in China consists of a few simple, cheap, robust technologies that don't belong to anyone: the wok, the bicycle, various structures made from bamboo and lashed together with strips of rattan, and now the 286 box. A

piece of Chinese technology, whether it's a cooking knife or a roofing tile, has the awesomely simple functionality of a piece ofhand-coded machine language.

Introducing non-copy-protected software into this kind of an environment may be the single most boneheaded thing that

American business has ever done in its long history of stepping on rakes in Asia. The Chinese don't draw any mystical distinctions between analog and digital tech; whatever works, works, and so they're happy to absorb things like pagers, cellphones, and computers if they find that such things are useful. I don't think you find a lot of Chinese expressing hostility toward computers or cellphones in the same way that technophobic Americans do. So they have not hesitated to enshrine the pager, the cellphone, and the 286 box in their pantheon of simple, ubiquitous technology, along with the wok, the bicycle, and the Kalashnikov assault rifle.

While avoiding technophobia, they've also avoided techno-fetishism for the most part. They don't name their computers "Frodo," and they generally don't use them to play games, or for anything more than keeping the accounts, running payroll, and processing a bit of text. In China, they treat computers like they treat dogs: handy for a few things, worth having around, but not worth getting overly attached to.

Shanghai's computer stores were all completely different. One place had a pathetic assortment of yellowed stuff from the

Apple II Dynasty. Another specialized in circuit boards, catering to do-it-yourselfers. There were several of what we'd call box movers: stores crowded with stacks of brand-new 486 boxes and monitors. And I found one place hidden way off the street in a giant old Western-style house, which I thought was closed at first because all the lights were off and no one seemed to be there. But then people began to emerge from the shadows one by one and turn on lights, one fixture at a time, slowly powering up the building, shedding light on an amazing panoply of used computers and peripherals spanning the entire history of the industry. In more ways than one, the place was like a museum.