An order for Microsoft software was cancelled by Beijing's municipal government after complaints that local governments do not support software developed domestically.
Li Wuqiang, a deputy director general with China's Ministry of Science and Technology, criticized government agencies prior to the cancellation of the contract.
According to a Xinhua news agency report, Li said in a written statement that some government buyers purchase foreign software at the expense of local products, regardless of national interest and security considerations.
The contract "deals a fatal blow to the development of the domestic software industry,'' Li said.
This incident is not good for Microsoft because it could potentially make other governments recognize lack of support for domestic software as well.
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