Microsoft's China plan: Trading jobs for piracy protection

The press release may not read this way, but Microsoft (MSFT) is trading jobs in the Chinese city of Hangzhou for protection against the piracy of its software. Over the years, the world's largest software company has almost certainly lost billions of dollars on pirated copies of its Windows software.

Microsoft will build a new tech center in the city, which will provide jobs for a large number of skilled Chinese engineers. Under most circumstances, a U.S. company would do this to have access to a well-trained, inexpensive labor force. Microsoft, however, has held out for a great deal more than that.