In an exclusive interview, Gates said Microsoft Research Asia (MSRA), a research lab in Beijing, is one of the company's "most successful" facilities and his "proudest investment."

"Some of the world's best software scientists are in China, their achievements are always ahead of my expectations,'' he said.

Gates said he faced strong challenges four years ago when he decided to set up the Asia lab in China, not in Japan or India.

But the decision was a wise one and the lab will become an engine for the company's future development, Gates said.

Chinese scientists have contributed to many of Microsoft's mainstream products. About 7 to 10 percent of the company's research and development staff are Chinese, according to the company.

These talented Chinese software experts will meet with their global peers in Beijing and Guangzhou this weekend to exchange their latest research achievements.

Co-organized by the National Science Foundation of China and the MSRA, the seminar has become the world's top software gathering.

Although China still comprises small numbers in global software, with only a 1 percent contribution to global software revenues last year, it will become the biggest market, Zhang Yaqin, managing director of Microsoft's research lab in Beijing.

Microsoft is not only expecting rich revenue feedback from China but more valuable ideas from local software professionals, said Zhang.

In the meantime, domestic software companies are wasting no time in catching up with their international peers.

Software companies that employ hundreds of top-level engineers are mushrooming around the country.

Kingsoft, one of the country's biggest software vendors, which is located across the street from Microsoft's Beijing office, said the company is ready for a booming market.

Lei Jun, president of Kingsoft, said domestic software vendors have a better understanding of the local market and can produce application software that satisfies the demand of local customers.

Wu Jichuan, minister of information industry, said recently that software and computer chips will be given special attention and preferential policies by the government.

He said software companies are facing a huge market as the government and traditional enterprises are moving towards information technology and will spend billions of yuan in software.

(China Daily October 16, 2002)