MICROSOFT has signed a memorandum of understanding with China to jointly develop the Chinese version of Windows 95, the next version of the software giant's personal computer graphical operating system. The move is another sign of warming relations between Microsoft and the Chinese Government. The memorandum is seen as a milestone by Microsoft, according to Laurie Kan, managing director of Microsoft Hong Kong. Under the agreement, China's Ministry of Electronics Industry (MEI) will help Microsoft to identify partners in the mainland for the development of technology in different areas, including fonts, input methods and connectivity. At a ceremony in Beijing last week, the memorandum was signed by Yang Tianxing director general of the Department of Computer at MEI and Yang Shaw-gang, Microsoft's general manager for the Greater China region. MEI's Mr Yang said he hoped the Chinese version of Windows 95 would use the best available Chinese language technology. 'Having Chinese software companies as partners to co-operate with Microsoft in its software localisation will provide the best product to serve PRC end users' needs,' Mr Yang said. While the memorandum referred specifically to the development of a localised Chinese version of Windows 95, it should provide the basis for further collaboration. 'It is the foundation to expand to more products and technology,' Mr Kan said. It is expected that under the agreement, MEI will help Microsoft identify potential partners with whom to develop the Chinese version of Windows 95. It would also consult with Microsoft on technological issues. Microsoft planned to implement a modular architecture for such aspects as font and input method systems. In this, MEI could play a role in identifying components of the base package. 'Our strategy on product components has technologically a modular platform,' Mr Kan said. 'We can add or remove as the industry changes. We will continue to listen to MEI about what should be included in the standard package but will encourage third party development. 'We will co-operate with MEI so we will be able to provide the best balance of what to offer [and what third parties should develop].' According to Mr Kan, Microsoft was expected to ship the Chinese version of Windows 95 before the end of 1995 and, accordingly, hoped to identify partners and begin work on its development within the next few months. Microsoft's Hong Kong operation would support the process through expansion of services in China, including certification programmes and product support and training. 'Hong Kong is playing the role of expanding service and support, particularly in southern China,' Mr Kan said. Talks between China's Ministry of Electronics Industry (MEI) and Microsoft began soon after Microsoft chairman Bill Gates' visit to China in March. The talks were aimed at repairing relations soured by Microsoft's handling of the development of the Chinese version of Windows 3.1.