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How China Systematically Pries Technology from U.S. Companies

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Re: How China Systematically Pries Technology from U.S. Companies

#111

Post by zip1234 »

paganel wrote: post #41
reaperducer wrote: post #12

Earlier quoted context omitted.

The US pried the textile and locomotives industries from the UK This is the sort of argument that an eight-year-old makes to his mother, and the mother responds, "If Jimmy jumped off a bridge, would you?" I don't know if you're an American or not, but there's an very common expression: Two wrongs don't make a right.

It helped the US become an industrialist behemoth, and as such I’d say it also helped the rest of the world (having more industrialized nations compared to fewer was a plus for human development, in the great scheme of things). As such I’d say that the eight-year old would be right.

It also happened over a hundred years ago. We are now in the 'modern era' and international trade is a much bigger part of any economy. The World Bank statistics only go back to 1960, but since that time the % of economy that is trade has gone from 25% to 50%. Much more significant to steal technology today. https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS

Re: How China Systematically Pries Technology from U.S. Companies

#112

Post by jarym »

StreamBright wrote: post #76
jarym wrote: post #72

US companies go into China eyes wide open - they can extract a few quarters of profit from their products and services but that's it; the Chinese will then expect to do it themselves and keep all the profits to themselves. To most its not a good deal. To US companies, that are driven by quarterly targets then it is very much a case of sacrificing the future for the present. And if they stay out of China then the odds…

Reminds me of Goolgle and Facebook comes to my country takes all the ad revenue and the country gets nothing.

Whoever bought the ads probably get some decent marketing don't they? And any local affiliates probably get a chunk in commissions.

The lions share of course go to the likes of Google/Facebook but its not totally correct to say the country gets nothing.

Re: How China Systematically Pries Technology from U.S. Companies

#113

Post by TeMPOraL »

alehul wrote: post #100
TeMPOraL wrote: post #97

Earlier quoted context omitted.

> In fact, the only argument I remember hearing (I think it was Marc Andreessen?) against the shaming of the scammer in the prince analogy is that they sometimes have no other option to feed their family. I doubt that justification applies to Chinese IP theft. I do not necessarily agree with this argument, but it actually translates to China's situation pretty directly - you could argue that their attitude to IP is a…

Fair point! From an ethical perspective I would still choose to shame it, but that equivalence can definitely be justified; it's no different than the Nigerian scammer but on a country-wide level. I like it. Another question would be whether the Chinese acquiring this IP would trickle down to help those in poverty, or whether the wealth would stay consolidated at the top.

> Another question would be whether the Chinese acquiring this IP would trickle down to help those in poverty, or whether the wealth would stay consolidated at the top.

A good question. If hardware market is any good of an indicator, I'd be hopeful - https://www.bunniestudios.com/blog/?p=4297.

Re: How China Systematically Pries Technology from U.S. Companies

#114

Post by firethief »

api wrote: post #69
simion314 wrote: post #66

Earlier quoted context omitted.

Can't the companies just not do business in China if they don't like the contract? Other countries have similar laws, like it forces companies to hire local people or spend part of the money locally. If China can afford to not respect the IP laws then there is nothing what a company can do, eventually the secrets would be reversed engineered.

They do. This is part of why we have such a large trade deficit with China. The real issue here is China's double-talk on trade. They talk about open free trade but in reality they practice intense nationalistic and protectionist trade tactics. They do everything possible to prevent foreign companies from selling anything in China, while at the same time doing everything they can to attract foreign labor outsourcing,…

Technology has stretched scarcity-based economics to the kind of breaking point where we complain when we get the iPhones and they get the sweatshops.

Re: How China Systematically Pries Technology from U.S. Companies

#115

Post by sangnoir »

coliveira wrote: post #16

The behavior they describe is exactly how every industrialized nation has become industrialized (except for UK). There is no way to develop a technologically advanced nation if you respect artificially imposed barriers such as patents, which by their very nature cannot be effectively enforced in foreign countries.

> The behavior they describe is exactly how every industrialized nation has become industrialized (except for UK).

Not even the UK is exempt- Robert Fortune stole tea production IP (and samples) from China(!) in a covert mission[1] for Britain[2]. Now tea is quintessentially british

1. https://www.smithsonianmag.com/history/the-great-british-tea...

2. I know Britain and the UK are not the same thing. Bear with me, NI.

Re: How China Systematically Pries Technology from U.S. Companies

#116

Post by kenmicklas »

natvert wrote: post #49

It's hard for me to believe that all the smart, capable company executives involved in planning and execution of operations in and around China are oblivious to IP risks. There is an obvious upside of operating in Asia, both cheap labor (though now decreasing) and strong work ethic coupled with access to a huge market. It seems to me that execs understand and take a calculated risk when they choose to do business in…

It sounds like you are advocating something like IP mercantilism which is even worse than the original mercantilism considering that IP is not a zero-sum commodity. It should be distributed as widely as possible.

Re: How China Systematically Pries Technology from U.S. Companies

#117

Post by zeroname »

misabon wrote: post #43

AMD has to license their stuff to Hygon too. I think it’s great. IP laws are stifling innovation and the fact that there is an escape hatch in China is a good thing.

IP laws also support innovation. Nobody would invest millions into figuring out the right arrangement of atoms that cures some disease, if there wasn't a way to profit from that.

At the other end of the spectrum is protecting the "invention" of buying something with a single mouse click.

There should be a healthy middle somewhere.

Re: How China Systematically Pries Technology from U.S. Companies

#118

Post by stcredzero »

YorkshireSeason wrote: post #11

There's a gentlemen's agreement between nations that this is permissible for poor nations. China is no longer poor and now must act like a wealthy nation and accept IP laws.

There's a gentlemen's agreement between nations that this is permissible for poor nations. China is no longer poor and now must act like a wealthy nation and accept IP laws.

Also, China has grown an upper class whose interests most strongly align with strong IP laws.

Re: How China Systematically Pries Technology from U.S. Companies

#119

Post by landryraccoon »

alehul wrote: post #106
ng12 wrote: post #87

Earlier quoted context omitted.

Part of the problem is expansion into China is a hot take for stockholders. It's difficult to stand in front of a board and say "no, we will never expand into China".

It's also essentially game theory; the first defectors (those entering the Chinese market) will seize most of the reward.

So now that US companies have entered China, can you name some examples of first entrants who have “seized the market”?

I think your entire premise is dubious. The first mover advantage cannot be great because the Chinese government will never allow a foreign company to have a dominant position in an important domestic Chinese market. Without significant change since in government those first entrant companies are simply very foolishly assuming the regulatory environment will be anything like it is in the United States or Europe.

Re: How China Systematically Pries Technology from U.S. Companies

#120

Post by pwaivers »

jarym wrote: post #72

US companies go into China eyes wide open - they can extract a few quarters of profit from their products and services but that's it; the Chinese will then expect to do it themselves and keep all the profits to themselves. To most its not a good deal. To US companies, that are driven by quarterly targets then it is very much a case of sacrificing the future for the present. And if they stay out of China then the odds…

> To US companies, that are driven by quarterly targets then it is very much a case of sacrificing the future for the present.

This comment comes off as trite and naive. Multi-billion dollar companies like DuPont and AMD Inc do not only think a few quarters ahead. They think years or decades ahead.

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