Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How China Systematically Pries Technology from U.S. Companies

wsj.com

Post reply on HN
Print view View original

131–140 of 208 posts

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

#131

Post by mistermann »

pwaivers wrote: post #120
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.

In some ways they do, but to what degree do senior executives, often near retirement (or wanting to hit a magic number they hold in their minds), make decisions that maximize short term returns? How would we even answer this question, considering no one really knows for sure to what degree the subconscious mind affects our decisions?

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

#132

Post by mistermann »

pjc50 wrote: post #31

There's a rather surprising attitude in this discussion that the IP belongs to a country (e.g. "Allowing non-citizens to get access to the IP should be illegal."), as if it were some sort of nationalised asset in common ownership. It's a privately owned asset for private benefit. It's not a form of property that pays property tax.

> It's a privately owned asset for private benefit. It's not a form of property that pays property tax.

Philosophically, could one not make the same argument that there are strong similarities between these two items? Indeed, it isn't currently strongly codified in law, but you don't seem to be arguing from that perspective.

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

#134

Post by mistermann »

zeroname wrote: post #102
mc32 wrote: post #57

Well, at least the cat’s out of the bag and the media aren’t pretending it doesn’t exist or that people are exaggerating, etc. Of course now people are going to normalize it and say it’s no big deal after years of saying it was an exaggeration. But that’s what you get when you get blinded by the lure of 1-billion potential consumers... along with an unfavorable trade agreement wich allowed for assymetrical tariffs, e…

> ...unfavorable trade agreement wich allowed for assymetrical tariffs, etc. Assymmetrical tariffs are more favorable than symmetrical tariffs, something practically every economist agrees on. Also, why insist on exporting more valuable goods to China, when China remains perfectly content with green pieces of paper instead?

Would it be more accurate to say: "Assymmetrical tariffs are more favorable than symmetrical tariffs, something practically every economist agrees on, for certain situations"?

Does there ever come a point where they should be normalized? From most of what I've read in mainstream news coverage, this topic seems to be considered not valid for discussion, as if the answer is self-evident (despite very few of the reporters, or readers, having any serious depth in the subject).

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

#135

Post by anon92612 »

landryraccoon wrote: post #119
alehul wrote: post #106

Earlier quoted context omitted.

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 si…

KFC, McDonald’s, Starbucks, Nike, Adidas, Polo, Estée Lauder, Coach, Michael Kors, Armani, Chanel, Gucci, are all extremely popular.

Go to any department store in China and the first two floors (i.e. the prime spots) all feature foreign brands.

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

#136

Post by fspeech »

optimiz3 wrote: post #122
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…

Perhaps we should consider revoking patent and other IP protections for companies that knowingly or negligently allow IP to be transferred to jurisdictions that do not respect IP rights in pursuit of profit. Otherwise it's a double whammy, your foreign competitors compete unbound while your domestic market competition is restricted. It would also align the game theory to prevent companies from "selling out" to such j…

Patents are public knowledge. How do you revoke public knowledge?

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

#137

Post by fspeech »

HillaryBriss wrote: post #36
rocketflumes wrote: post #20

Earlier quoted context omitted.

I understand that the scope and scale of the technology transfer agreements may be unreasonable, but surely these foreign companies aren't "forced" to oblige? I'm not sure if it's on China that many companies find it more profitable to have access to the Chinese market than to hold on to their IPs.

When China was admitted to the WTO, manufacturers in China gained access to other WTO member markets on better terms than they had before. And, in theory, in exchange for that access, outside companies gained new access to the Chinese market - to investing in factories there and selling products and services there. That was supposed to be part of the WTO deal. But, the requirement in China that state owned companies…

No WTO is about trade and it is fairly silent on investment. See https://www.wto.org/english/tratop_e/invest_e/invest_info_e.... "As an agreement that is based on existing GATT disciplines on trade in goods, the Agreement is not concerned with the regulation of foreign investment. The disciplines of the TRIMs Agreement focus on investment measures that infringe GATT Articles III and XI, in other words, that discriminate between imported and exported products and/or create import or export restrictions."

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

#138

Post by ahi »

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…

IP theft is a long-term risk, while cheap labor and access to the Chinese market are short term benefits.

Company executives may have short term incentives, and little interest in the long term health of their organizations.

Company executives have to compete with executives willing to compromise their company's long term health in the short term.

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

#139

Post by analognoise »

ndesaulniers wrote: post #35
analognoise wrote: post #34

I don't get it: why not just not do business with China? If they're going to take your IP, just don't go there.

Then how do you complete when your competitors already have and their costs are now significantly reduced?

If you absolutely require lower wages to make a profit (your business plan has already failed, but let's go with it):

Go to any one of a number of other countries that don't expect you to partner with a communist dictatorship and give up IP in order to have goods produced there? Vietnam, Thailand, Malaysia, Mexico, India?

It seems like a pretty obvious "AVOID" signal for me, but I'm not running a multinational that's cut corners to keep profit margins high while exporting all of the manufacturing work.

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

#140

Post by gwern »

TeMPOraL wrote: post #70
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.

> 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?" Of course? This is one of the stupidest question in the world; I don't understand how parents worldwide are still repeating it. Randall Munroe explains it best: https://xkcd.com/1170/ .

Munroe redefines it to make it less stupid, but it's still stupid. Which is more likely, that you somehow are missing an entire bridge on fire or collapsing while on it, or that they are being dumb? Mass suicides are not, in fact, unheard of. In the case of 'if Jimmy jumped off a bridge, would you', it's even dumber because Jimmy is jumping off a bridge all the time - to commit suicide. The Golden Gate Bridge alone has had around 1600 suicides (https://en.wikipedia.org/wiki/Suicides_at_the_Golden_Gate_Br...), >20 annually, net of all the safety measures & attempts to talk people down; as far as I am aware, 0 of them were jumping to escape a fire or serious problem, and if they were, at a fatality rate of >98%, it's difficult to think of a real event on the Golden Gate where jumping was better than not jumping. A similar observation obtains for... quite a lot of bridges. (Humans aren't good at falling.)
Post reply on HN