China vs. Western companies: Best defense is a strong offense

[xunzi]

I understand what you're saying, but it's not a great parallel. Japan didn't force foreign companies into JVs, and while Japanese products imitated Western products for a long time (e.g. the initial creations of Lexus), Japan never engaged in outright theft of IP, or at least not to the level of China. The United States trusts Japanese companies, because they have proven that they will protect IP. That's why the US trusted Toshiba when it acquired Westinghouse, even though Westinghouse, by any definition, could be considered a national security crown jewel.

I am certain that when Chinese companies also prove that they respect IP, they will be given the same opportunities. Foxconn didn't grow into the powerhouse it is today by constantly stealing IP (and yes, I know it is is Taiwanese, but it's relevant because of its huge manufacturing base in China). It protected the IP of its customers, and became the go-to contractor because of it. The cause and effect of this relationship is straightforward, and I think China will get there at some point, but really, that's up to China, not us.

You see, this is why we never see eyes to eyes because your angle is that we do this, thus you respond this way. That is further from the truth. You were ALWAYS an offensive, the initiator of any misunderstanding and we were always on the defense and reacting to your decision. Let not forget that the ban on selling high-end technology to China dating back to 1989. It wasn't certainly us to make that decision. You made that decision based on your ideological principle. You believe you shouldn't sell your high-end tech to any non-democratic, non-ally country. We believe there should be no limitation. In the end, you chose to stick with your ban restriction and we chose to keep a relax IP to catch up because we had no other choices. It is that plain simple.

 

[Genesis]

I'm afraid business and corporate culture -- which I drew reference to CSR -- isn't as simplistic as that. What is emphasized , however, is that there needs to be an understanding between partners to the level that would be considered fair for both parties. There are no threats being implied by multinationals in China, it is the other way around. I would encourage you to review peer reviewed journal articles reflecting this phenomena. It would do you good to build a realistic and comprehensive view.

let's keep it simple. I don't have a problem with the principle, but I do have a huge problem of how it's supposed to be implemented.

No threats? Really? Have you read the news recently? Or ever?

I know you are nationalistic, but come on, it's everywhere, this reminds me of the story of my dad's childhood where the party broadcasts that everyone have plenty to eat and lives great, even though they can see everywhere that it's not true.

 

[Aepsilons]

I understand what you're saying, but it's not a great parallel. Japan didn't force foreign companies into JVs, and while Japanese products imitated Western products for a long time (e.g. the initial creations of Lexus), Japan never engaged in outright theft of IP, or at least not to the level of China. The United States trusts Japanese companies, because they have proven that they will protect IP. That's why the US trusted Toshiba when it acquired Westinghouse, even though Westinghouse, by any definition, could be considered a national security crown jewel.

I am certain that when Chinese companies also prove that they respect IP, they will be given the same opportunities. Foxconn didn't grow into the powerhouse it is today by constantly stealing IP (and yes, I know it is is Taiwanese, but it's relevant because of its huge manufacturing base in China). It protected the IP of its customers, and became the go-to contractor because of it. The cause and effect of this relationship is straightforward, and I think China will get there at some point, but really, that's up to China, not us.

@LeveragedBuyout,


I’ve been following the Chinese corporate laws as of late (interestingly enough, I’m preparing a class lecture on this). The latest amendment to the Company Law of the People’s Republic of China which became effective on January the 1st of 2006 appears to bring Chinese company legislation more or less into line with the corporate legislation in other international jurisdictions. While not identical to any foreign model, the Company Law now sets out typical shareholders’ rights and remedies, directors’ duties, and offenses that were absent from or not enforceable in the previous 1999 amendment. It also adds clearer provisions on capital requirements for establishing companies and on issuing and transferring shares and issuing debentures; includes more detailed financial reporting provisions, clarifies provisions relating to mergers, divisions and liquidation, and for the first time permits “one-member” companies to be registered, amongst other changes.

However one thing that got me thinking when reading the specifics was the total ambiguity of these new provisions, which really will require clarification by judicial interpretation, such as provisions do not at least resemble their counterparts. And the issue that causes me to dismay is that at this particular time there are no Chinese judicial rulings that addresses these ambiguity, in fact, the final decision is made by the communist courts, of course whose loyalties are directly to the Party. Reading this, and analyzing this, I cannot help but feel the sense of dismay for multinational firms in China. It seems that on the superficial, everything looks good, but as one researches into the internal dynamic, the legal aspects – one hits a wall. A wall that, unfortunately, favor the Party. The Chinese Communist Party.

 

[LeveragedBuyout]

The rest of the world has not been able to accomplish this. Only those where rich before have accomplished this. Every country that has significant IP today had significant IP back in 1900 and every country rich today was already rich in 1900. There are exactly 2 countries without natural resources that are developed (>1/2 US GDP per capita) today that were poor (<1/4 US GDP per capita) in 1900, and those are South Korea and Singapore. Every country poor in 1900 is still poor today. The reason South Korea and Singapore developed is because South Korea received significant foreign aid amounting to up to 74% of total investment in South Korea from 1953 to 1960, and Singapore recruits foreign corporations; it does not have much native intellectual property.

For South Korean information, see page 12: http://www.nber.org/chapters/c4063.pdf

China has none of these luxuries.

I would love to see your numbers for these claims, because I cannot verify them. Here are the results from Contours of the World Economy, 1–2030 AD (by Angus Maddison, spreadsheet available here if you care to check the numbers for yourself):

Using a simple Excel formula to determine where a country's GDP/capita was < 0.5 of that of the US in 1900, and > 0.5 of the US in 2003, here are the results:

Finland
Italy
Norway
Spain
Japan

Also included, if one relaxes the year 1900 requirement due to lack of data:
South Korea (1911)
Taiwan (1912)

Edit: It gets worse for your case, I'm afraid. I'll add a few more, if we start from 1950:
Israel
Singapore
Hong Kong
Trinidad and Tobago

Honorable mention:
Equatorial Guinea went from 6% of US GDP/capita in 1950 to 47% of US GDP/capita in 2003.

Are you going to write off these countries because it doesn't fit your fixed conception, or will you acknowledge that just as it was possible for these countries to catch up to the US without stealing IP (with the possible exception of Japan), it is possible for China as well? Based on this data, your case doesn't hold up, so please provide the data you used.

If it were not for Chinese creativity, the willingness to have real learning and innovation (not just within the box you set) and sheer tenacity, we would end up like India - a country with so much potential that restricts itself by obeying foreign norms designed to keep them down.

This seems to contradict everything else you have said. I suppose one could classify stealing IP as "creativity, the willingness to have real learning and innovation (not just within the box you set) and sheer tenacity," in that it takes a lot of nerve to so blatantly engage in such acts, but that's not the mainstream definition. On the contrary, I would say independent R&D and the ability to pull oneself up by one's own bootstraps would better exemplify "creativity, the willingness to have real learning and innovation (not just within the box you set) and sheer tenacity."

Foxconn is a great example. It has little native technology and is just a contract manufacturer. It will never build a global brand. Its competitive point is price, not innovation. It is not irreplacable and its strengths are organizational, not technological. Technological innovators are Huawei, ZTE, SMIC, etc.

Chinese companies will never be given the same opportunities in the US. Huawei is a top 5 innovator in telecommunications (measured by WIPO patents) and the largest company in the market, and it has actively given up the US market because the company realized it would not receive fair treatment.

And yet Samsung started out not so different from Foxconn, but succeeded. Why do you think Huawei is treated the way it is? We both know it's as simple as plugging in "Huawei" and "Cisco" into Google.

Never say never. Chinese companies will be treated fairly in the US when they treat our companies fairly in China. If China doesn't want to treat our companies fairly (by stealing their IP), how can China then complain that their companies are not treated fairly in the US? China doesn't even need to do anything proactive to change the situation. All it needs to do is stop doing what it's been doing.

 

[Aepsilons]

let's keep it simple. I don't have a problem with the principle, but I do have a huge problem of how it's supposed to be implemented.

No threats? Really? Have you read the news recently? Or ever?

I know you are nationalistic, but come on, it's everywhere, this reminds me of the story of my dad's childhood where the party broadcasts that everyone have plenty to eat and lives great, even though they can see everywhere that it's not true.

Hi,

For multinational companies, the appraisal of China’s huge potential markets against the risks of assaults on their competitive advantages needs reevaluation is an important consideration. An important characteristic of multinationals are their investment in their intangible assets, such as development and research, reputation, advertising and managerial skills which give them competitive advantages over local enterprises’ know ledge of conditions and local markets. Multinationals need strategies that protect their long term investments in intangible assets and secure returns on investments. The Chinese market has several potential obstacles that effective multinationals must consider.

The global business risk consulting enterprises include China with their Asian neighbors India, Indonesia, South Korea and Thailand. However, for intellectual property violations, many regard China as being in a league of its own. The nation is a major world center for counterfeiting. Copyright violations are conducted by unscrupulous business people and abetted by the employees of the multinationals being “ripped off”. Some mainland-based Western pharmaceutical manufacturers put the counterfeit rate at 10 percent or more. Increasingly, as multinationals suffer losses, decisions about whether to make further investments in China may be dropped altogether or put on hold. The counterfeiting issue influences P&G’s ability to raise the prices of its product. Counterfeiters can undercut on price. Foreign multinationals like P&G face with loss of their revenues in China through counterfeiting and loss of their reputation and their export markets. Given said exigencies, it is through objective analysis and conclusion that leads me to the premise of the plight of multinational firms within China. And to quote @LeveragedBuyout in another thread, “This is an example of a Zero Sum" strategy.

I would counsel you to do some readings of up to date peer reviewed journal articles on this subject matter.

I know you are nationalistic, but come on, it's everywhere, this reminds me of the story of my dad's childhood where the party broadcasts that everyone have plenty to eat and lives great, even though they can see everywhere that it's not true.

In this subject matter, the interest are multinational and not towards one particular country. These are for the interests of not merely Japan, there is a greater objective being assessed and emphasized here. Sometimes it is imperative for one to "step outside of the box" to make a comprehensive analysis, devoid of subjective bias.




Best,
@Nihonjin1051

 

[Lux de Veritas]

Hi,

For multinational companies, the appraisal of China’s huge potential markets against the risks of assaults on their competitive advantages needs reevaluation is an important consideration. An important characteristic of multinationals are their investment in their intangible assets, such as development and research, reputation, advertising and managerial skills which give them competitive advantages over local enterprises’ know ledge of conditions and local markets. Multinationals need strategies that protect their long term investments in intangible assets and secure returns on investments. The Chinese market has several potential obstacles that effective multinationals must consider.

The global business risk consulting enterprises include China with their Asian neighbors India, Indonesia, South Korea and Thailand. However, for intellectual property violations, many regard China as being in a league of its own. The nation is a major world center for counterfeiting. Copyright violations are conducted by unscrupulous business people and abetted by the employees of the multinationals being “ripped off”. Some mainland-based Western pharmaceutical manufacturers put the counterfeit rate at 10 percent or more. Increasingly, as multinationals suffer losses, decisions about whether to make further investments in China may be dropped altogether or put on hold. The counterfeiting issue influences P&G’s ability to raise the prices of its product. Counterfeiters can undercut on price. Foreign multinationals like P&G face with loss of their revenues in China through counterfeiting and loss of their reputation and their export markets. Given said exigencies, it is through objective analysis and conclusion that leads me to the premise of the plight of multinational firms within China. And to quote @LeveragedBuyout in another thread, “This is an example of a Zero Sum" strategy.

I would counsel you to do some readings of up to date peer reviewed journal articles on this subject matter.


Best,
@Nihonjin1051

The rise of supra national MNC in my opinion will not be good for the world. What China is doing is "managed trade" instead of "free trade" or globalization.

It is the interest and Chinese to control MNC, to make them responsible to the state rather than following the USA style. Right now, supra national MNC spawn supra national elites, which has no loyalty and not accountable to any states or people. These elites uses shell child companies to avoid being tax. As a result, nation states are bankrupt all over the world, while transnational elites prosper beyond the wildest dream.

 

[fallstuff]

Over-priced western goods should leave the Chinese market once and for all。

Otherwise play by the rules and lower the prices of your goods to a level that's the same as in western markets after due consideration for taxes and duties.

The days when a Mercedes that sells for 100000 USD in Germany or the US fetches 300,000 USD in China are gone.

The days when parts of a car sell for 600% of the car price are also gone.

Stop robbing Chinese consumers,

I just checked some prices. The prices of the E 320 ( not available in USA) in China is $113,000, which is twice as much as the E350. But hey if the Chinese are paying for it, who is complaining.

This is probably good for Chinese car company as this will allow them to offer more for less. I see Hyundai selling the Genesis for around $30,000 offering far more for less money against GS37, IS 350, or the Acura.

Prices of cancer treatment drugs are astronomically higher in the USA, in some cases 100 times more than European prices, but thats how it is here.

Mercedez Benz will charge whatever the Chinese market will pay, especially if the cars are flying out of the dealership.

 

[Aepsilons]

The rise of supra national MNC in my opinion will not be good for the world. What China is doing is "managed trade" instead of "free trade" or globalization.

It is the interest and Chinese to control MNC, to make them responsible to the state rather than following the USA style. Right now, supra national MNC spawn supra national elites, which is no loyalty and not accountable to any states or people. These elites uses shell child companies to avoid being tax. As a result, nation states are bankrupt all over the world, while transnational elites prosper beyond the wildest dream.

There, indeed, is an overflow effect of corporate culture affecting the society in which it operates. The positive contribution cannot be emphasized enough. When we analyze the implementation of workers' rights, health rights, and all basic rights afforded to employees by the employer, the development of an organizational culture is one theoretically allows the improvement of societal demands. When organizations develop into teams, we witness the development of an organized structure, seminar amongst employees also encourages and fosters a culture of open rapport. Problems can be identified easily this way either it be an internal issue or external.

Can you please explain to me how , as what you would phrase it, a managed trade in the Chinese market can quantitatively as well as qualitatively reduce the amount of IP incursions. Perhaps you can elaborate for me on how such a policy would forward judicial proceedings that takes into consideration the interests of organizations' intangible assets. In other words, I do hope you're not excusing Intellectual property theft as a way to prevent the genesis of a "supra national elite". I hope not because if you are, that calls into question your own ethicality.



Respectfully I Remain,
@Nihonjin1051

 

[Lux de Veritas]

There, indeed, is a overflow effect of corporate culture affecting the society in which it operates. The positive contribution cannot be emphasized enough. When we analyze the implementation of workers' rights, health rights, and all basic rights afforded to employees by the employer, the development of an organizational culture is one theoretically allows the improvement of societal demands. When organizations develop into teams, we witness the development of an organized structure, seminar amongst employees also encourages and fosters a culture of open rapport. Problems can be identified easily this way either it be an internal issue or external.

Can you please explain to me how , as what you would phrase it, a managed trade in the Chinese market can quantitatively as well as qualitatively reduce the amount of IP incursions. Perhaps you can elaborate for me on how such a policy would forward judicial proceedings that takes into consideration the interests of organizations' intangible assets. In other words, I do hope you're not excusing Intellectual property theft as a way to prevent the genesis of a "supra national elite". I hope not because if you are, that calls into question your ethicality.



Respectfully I Remain,
@Nihonjin1051

Sad to say, IP incursion is a way of life for all companies. It is the interest for PRC to keep using IP free of charge unless she do not want to develop at the current pace.

I have not done any deep research on IP incursion, but I believe Japan did copy a lot of white man stuff when she was playing catching up.

Once China become the strong technological state, you will see her ranting IP rights.

 

[Aepsilons]

Sad to say, IP incursion is a way of life for all companies. It is the interest for PRC to keep using IP free of charge unless she do not want to develop at the current pace.

I have not done any deep research on IP incursion, but I believe Japan did copy a lot of white man stuff when she was playing catching up.

Once China become the strong technological state, you will see her ranting IP rights.

Your answer does not satisfy me. Thanks tho.

 

[Genesis]

Hi,

For multinational companies, the appraisal of China’s huge potential markets against the risks of assaults on their competitive advantages needs reevaluation is an important consideration. An important characteristic of multinationals are their investment in their intangible assets, such as development and research, reputation, advertising and managerial skills which give them competitive advantages over local enterprises’ know ledge of conditions and local markets. Multinationals need strategies that protect their long term investments in intangible assets and secure returns on investments. The Chinese market has several potential obstacles that effective multinationals must consider.

The global business risk consulting enterprises include China with their Asian neighbors India, Indonesia, South Korea and Thailand. However, for intellectual property violations, many regard China as being in a league of its own. The nation is a major world center for counterfeiting. Copyright violations are conducted by unscrupulous business people and abetted by the employees of the multinationals being “ripped off”. Some mainland-based Western pharmaceutical manufacturers put the counterfeit rate at 10 percent or more. Increasingly, as multinationals suffer losses, decisions about whether to make further investments in China may be dropped altogether or put on hold. The counterfeiting issue influences P&G’s ability to raise the prices of its product. Counterfeiters can undercut on price. Foreign multinationals like P&G face with loss of their revenues in China through counterfeiting and loss of their reputation and their export markets. Given said exigencies, it is through objective analysis and conclusion that leads me to the premise of the plight of multinational firms within China. And to quote @LeveragedBuyout in another thread, “This is an example of a Zero Sum" strategy.

I would counsel you to do some readings of up to date peer reviewed journal articles on this subject matter.



In this subject matter, the interest are multinational and not towards one particular country. These are for the interests of not merely Japan, there is a greater objective being assessed and emphasized here. Sometimes it is imperative for one to "step outside of the box" to make a comprehensive analysis, devoid of subjective bias.




Best,
@Nihonjin1051

I'm telling you again, I'm fine with the principle of things, but not with the way you guys want to implement it.

You don't have to dodge the question with me, because I know exactly what the answer is before you even say it. I know it's unpleasant, but seeing as how Chinese members, including myself, have to answer some really unpleasant question regarding our nation, you don't feel we deserve a straight answer.


I specifically didn't mention Japan, not sure how much voice Japan wants to have in this field. I am mentioning the US. What are the common US responses. "Tough on China," "Make China realize the costs," "boycott China," "force China to be a responsible player," "make cheats like China...."

I didn't make these up, it may not be the exact wording, but all of those words have been said, if you follow the news, you know they said it. It's not exactly in private.


Do you feel this is the way to conduct business, to make China look as if we are folding instead of simply evolving our economy.



@Nihonjin1051 @LeveragedBuyout

side question, do you feel the current China is better or worse than the one you saw some 10-20 years ago. Do you have more respect for our power or less.

Then we can continue the discussion on the perception of China, if you want.

 

[Aepsilons]

I'm telling you again, I'm fine with the principle of things, but not with the way you guys want to implement it.

Please explain to me what exactly you find reprehensible about the method that the multinational organizations use. There is an established procedure for dealing with issues regarding an organization's intangible assets per se Intellectual Property Rights. What Western corporations are calling into question is the outright investigation of outright theft, the implementation of judicial proceedings and punishment of those involved and those who abet such actions. You see this is the issue that many multinational corporations have with China because as much as China is developing into a mature economy, it still is not abiding with international norms that address said issues. If China wants to be respected by the global partners, it has to do its part and prevent outright , unscrupulous IP theft, or if such an incident occurs, has to judiciously take action. This would boost confidence of China's partners and the positive views the world has on China in regards to IP.

Personally, given my interests in the field and in corporate structure, I actually want China to succeed and to develop its corporate structure to the level seen in many Western and Japanese firms. I want a healthy, sound competition between said corporations , with systems set in place to take action in the event there are violations. Despite news media reports , I do remain hopeful and optimistic in regards to China.

You don't have to dodge the question with me, because I know exactly what the answer is before you even say it. I know it's unpleasant, but seeing as how Chinese members, including myself, have to answer some really unpleasant question regarding our nation, you don't feel we deserve a straight answer.

I am giving you a direct answer in all of my posts, perhaps you can clarify with me in any area where you felt I was being obscure, and I would readily and happily provide clarification.

I specifically didn't mention Japan, not sure how much voice Japan wants to have in this field. I am mentioning the US. What are the common US responses. "Tough on China," "Make China realize the costs," "boycott China," "force China to be a responsible player," "make cheats like China...."

These are remarks made in response to the Intellectual Property Rights violations. Put yourself in the shoes of American, British, Japanese, Korean corporations who are experiencing said exigencies. The R&D costs to develop said products they produce are in the millions if not billions of dollars, and thus outright theft of said R&D is not only repulsive but threatening to their interests. Try to make a conclusive analysis.

Do you feel this is the way to conduct business, to make China look as if we are folding instead of simply evolving our economy.

I don't know your definition of "conducting business", but I don't think voracious IP theft is exemplary of business proceedings. Do clarify with me.




Best,
@Nihonjin1051

 

[LeveragedBuyout]

Do you feel this is the way to conduct business, to make China look as if we are folding instead of simply evolving our economy.

China chooses to frame it this way. China could easily declare that it has moved beyond its inferior status, and will now take a leading role among the nations in pushing forward science, technology, etc. Presto, China removes the major friction with the West, while massaging its own ego. This isn't a difficult thing to accomplish.

@Nihonjin1051 @LeveragedBuyout

side question, do you feel the current China is better or worse than the one you saw some 10-20 years ago. Do you have more respect for our power or less.

Then we can continue the discussion on the perception of China, if you want.

China is without a doubt better than the one I saw 20 years ago, except for the political question. 1989 was a momentous year that changed history, and sometimes I am sad to think about what China might have been if it had chosen to tolerate some political diversity instead of doubling down on authoritarianism, but in aggregate, there can be no question: China has improved dramatically.

I am not certain that "respect" is the right way to describe what we feel towards China's power, because from our perspective, China deploys that power capriciously. It was easier to "respect" the USSR, simply because it operated in a Western ideological framework, just at the other end of the spectrum. The USSR believed in its own economic system, Communism, and thus it would be unthinkable for the USSR to engage in industrial espionage in order to out-compete our corporations; espionage was reserved for military or security issues.

China's actions are inscrutable to the Western mind (accumulating power for the sake of power doesn't make sense to us; accumulating power to enrich the citizenry is more understandable, but that's not the CCP's goal). As you and others have made clear, about the only thing China seems to believe in is its own power. It hasn't laid out a framework of values that would at least give us a context to understand what it's after. China complains about the Western system, but offers no alternative. Even the SCO and the new anti-IMF and anti-World Bank organizations set up by China can never replace their Western counterparts, they can only "compete" with them (if that's the right phrase to use).

We could reach an understanding with the USSR, where we had an unspoken agreement that there would not be a world war between us, but rather our ideological "Great Game" would be played out in "small wars" through our proxies. The USSR would attempt to spread Communism throughout the world to make the world safe for Communism, and we would attempt to spread liberal democracy throughout the world, to make the world safe for liberal democracy.

We have no such understanding with China, as far as I am aware. If China has secretly made an offer to the US, (i.e. give us free reign in the SCS, and we won't made trouble in the ECS), I am not aware of it, of course. But based on the behavior of our own leadership, either such an offer has never been made, or it has been rejected. Thus, we are left with a vacuum, and we don't know what China is after, or what it will do, or when it will do it. So we prepare for contingencies, and China interprets this as containment, or encirclement, and responds aggressively. And the vicious circle rolls on. We are falling back, by default, into a new Cold War model in lieu of "a new kind of great power relationship" (to this day, still undefined).

I wouldn't call it respect. It's probably closer to fear, to be honest. But we feared the USSR, too. So what is needed today is to reach some kind of understanding with China for how the world will look for the next several decades, but the stars have not aligned for that kind of meeting of the minds, yet.

 

[gambit]

We could reach an understanding with the USSR, where we had an unspoken agreement that there would not be a world war between us, but rather our ideological "Great Game" would be played out in "small wars" through our proxies. The USSR would attempt to spread Communism throughout the world to make the world safe for Communism, and we would attempt to spread liberal democracy throughout the world, to make the world safe for liberal democracy.

We have no such understanding with China, as far as I am aware.

That is it. Right there.

The Chinese members here have no clue on what their country want and is going to be. How could they when their own leadership does not know ? China have nothing to offer the world other than China want and is going to be a great power, and like you pointed out, it is so far power for its own sake, not for the betterment of the world.

 

[Genesis]

Please explain to me what exactly you find reprehensible about the method that the multinational organizations use. There is an established procedure for dealing with issues regarding an organization's intangible assets per se Intellectual Property Rights. What Western corporations are calling into question is the outright investigation of outright theft, the implementation of judicial proceedings and punishment of those involved and those who abet such actions. You see this is the issue that many multinational corporations have with China because as much as China is developing into a mature economy, it still is not abiding with international norms that address said issues. If China wants to be respected by the global partners, it has to do its part and prevent outright , unscrupulous IP theft, or if such an incident occurs, has to judiciously take action. This would boost confidence of China's partners and the positive views the world has on China in regards to IP.

Personally, given my interests in the field and in corporate structure, I actually want China to succeed and to develop its corporate structure to the level seen in many Western and Japanese firms. I want a healthy, sound competition between said corporations , with systems set in place to take action in the event there are violations. Despite news media reports , I do remain hopeful and optimistic in regards to China.



I am giving you a direct answer in all of my posts, perhaps you can clarify with me in any area where you felt I was being obscure, and I would readily and happily provide clarification.

everything up to this point I'm ok with. The thing I'm not ok with is the next part.

These are remarks made in response to the Intellectual Property Rights violations. Put yourself in the shoes of American, British, Japanese, Korean corporations who are experiencing said exigencies. The R&D costs to develop said products they produce are in the millions if not billions of dollars, and thus outright theft of said R&D is not only repulsive but threatening to their interests. Try to make a conclusive analysis.

I'm not putting myself in anyone's shoes, as I doubt any Americans have or want to. Let's just say I been thinking of them as much as they have of me.

Being free and independent or being liked, well, given the choice I believed the former is better, the latter resulted in carriers on our shores.

I don't know your definition of "conducting business", but I don't think voracious IP theft is exemplary of business proceedings. Do clarify with me.

What we are doing is wrong, but it is in the interests of China, I know you mention perception, but I will get to that the next part with Leverage.

What I mean is does US think threatening us or make us look bad will work? Maybe it will who knows.


Best,
@Nihonjin1051[/quote]

China chooses to frame it this way. China could easily declare that it has moved beyond its inferior status, and will now take a leading role among the nations in pushing forward science, technology, etc. Presto, China removes the major friction with the West, while massaging its own ego. This isn't a difficult thing to accomplish.

We are not ready to compete toe to toe with the US, but in the field where we are, you be hard pressed to find intellectual properties stolen on a massive scale.

The Xiaomi phone may have some similarities, and they may not be entirely coincidental, but the market for Xiaomi is different, and the business model even more so.

There are more fields where we don't really look to the West anymore, but these are still in the minority.

China is without a doubt better than the one I saw 20 years ago, except for the political question. 1989 was a momentous year that changed history, and sometimes I am sad to think about what China might have been if it had chosen to tolerate some political diversity instead of doubling down on authoritarianism, but in aggregate, there can be no question: China has improved dramatically.

I am not certain that "respect" is the right way to describe what we feel towards China's power, because from our perspective, China deploys that power capriciously. It was easier to "respect" the USSR, simply because it operated in a Western ideological framework, just at the other end of the spectrum. The USSR believed in its own economic system, Communism, and thus it would be unthinkable for the USSR to engage in industrial espionage in order to out-compete our corporations; espionage was reserved for military or security issues.

China's actions are inscrutable to the Western mind (accumulating power for the sake of power doesn't make sense to us; accumulating power to enrich the citizenry is more understandable, but that's not the CCP's goal). As you and others have made clear, about the only thing China seems to believe in is its own power. It hasn't laid out a framework of values that would at least give us a context to understand what it's after. China complains about the Western system, but offers no alternative. Even the SCO and the new anti-IMF and anti-World Bank organizations set up by China can never replace their Western counterparts, they can only "compete" with them (if that's the right phrase to use).

We could reach an understanding with the USSR, where we had an unspoken agreement that there would not be a world war between us, but rather our ideological "Great Game" would be played out in "small wars" through our proxies. The USSR would attempt to spread Communism throughout the world to make the world safe for Communism, and we would attempt to spread liberal democracy throughout the world, to make the world safe for liberal democracy.

We have no such understanding with China, as far as I am aware. If China has secretly made an offer to the US, (i.e. give us free reign in the SCS, and we won't made trouble in the ECS), I am not aware of it, of course. But based on the behavior of our own leadership, either such an offer has never been made, or it has been rejected. Thus, we are left with a vacuum, and we don't know what China is after, or what it will do, or when it will do it. So we prepare for contingencies, and China interprets this as containment, or encirclement, and responds aggressively. And the vicious circle rolls on. We are falling back, by default, into a new Cold War model in lieu of "a new kind of great power relationship" (to this day, still undefined).

I wouldn't call it respect. It's probably closer to fear, to be honest. But we feared the USSR, too. So what is needed today is to reach some kind of understanding with China for how the world will look for the next several decades, but the stars have not aligned for that kind of meeting of the minds, yet.

We do have a ideology it is, security, peace, development, and prosperity. I mean I just made that up now, but it's stil lwhat China is known for.

China in many ways is better for the developing world than the US, as our model has proven to succeed for a developing nation.

watch this, it's not exactly what I talked about, but it's a start.


As to understanding, we can't have that, because we are not fighting for some third nation, we can't back out of China, we are in our sphere and fighting for dear life. Tell me how we can compromise without moving to mars.


I know it's hard for you to accept, but seeing your countrymen poor and suffering isn't the greatest pleasure Chinese politicians have. Much of the new policies are for improving the everyday life of the ordinary citizens.

China doesn't have much of an anti West institutions, not time yet, we are just testing the waters, send some forward scouts and see what's up. The real challenge comes later.


Wouldn't call it respect? Fear? Good enough, 10-15 years ago you guys didn't have this. We test missiles you misdirect them using GPS, and send carriers, today we are building islands sending rigs, and much much more, Huangyan island is ours now again for one, and no carrier sent to intimidate.

If that's not the fruits of our strategy, I don't know what is. Good life for the people and the demand for second thoughts on international issues, you can find another nation that didn't do what we do, and we play with them for fun. So, results speak louder than words and money matters more than feelings.

But that's just me.