Chinese Intellectual Property Acquisition Tactics Exposed 398
hackingbear writes "In an interview published in Sina.com.cn, Chinese rail engineers gave a detailed account of the history, motivation, and technologies behind the Chinese high-speed rail system. More interestingly, they blatantly revealed the strategies and tactics used in acquiring high-speed rail tech from foreign companies (Google translation of Chinese original). At the beginning, China developed its own high-speed rail system known as the Chinese Star, which achieved a test speed of 320km/h; but the system was not considered reliable or stable enough for operation. So China decided to import the technologies. The leaders instructed, 'The goal of the project is to boost our economy, not theirs.' A key strategy employed is divide-and-conquer: by dividing up the technologies of the system and importing multiple different technologies across different companies, it ensures no single country or company has total control. 'What we do is to exchange market for technologies. The negotiation was led by the Ministry of Railway [against industry alliances of the exporting countries]. This uniform executive power gave China huge advantage in negotiations,' said Wu Junrong, 'If we don't give in, they have no choice. They all want a piece of our huge high speed rail project.' For example, [Chinese locomotive train] CRH2 is based on Japanese tech, CRH3 on German tech, and CRH5 on French tech, all retrofit for Chinese rail standards. Another strategy is buy-to-build. The first three trains were imported as a whole; the second three were assembled with imported parts; subsequent trains contain more and more Chinese made parts."
Re:capitalists take note (Score:4, Informative)
capitalism is the competition between equals in the marketplace. corporatism is the abuse of and domination of the marketplace by its largest players
to maintain a truly capitalistic marketplace, you need government regulation to level the playing field between the large and the small (despite what some deluded naive fools will tell you otherwise). the unfortunate reality is that currently in the west corporations simply corrupt the government's regulatory laws and enforcement apparatus to entrench their position, rather than oppose their position, as the government naturally should
i'm not saying getting corporate corruption out of our government is easy, but i am saying that it is the only way we can move forward. because unfortunately, the chinese government will simply use our own corporate corruption against us, in the form of multinational corporations interfering with our internal politics with their money. if we don't fight corporate influence of our democracy, we are facing the ultimate victory of autocracy and corporatism over capitalism and democracy in the form of the rise of china, which will use our own unfortunate collusion with corporations against us eventually, as beijing becomes the eventual master of multinationals
Re:Can a Mandarin speaker comment on translation? (Score:3, Informative)
Could someone fluent in Mandarin comment on the translation? I'm especially interested in this translation: "The goal of the project is to boost our economy, not theirs." Is the implication that the Chinese gov't wants their trading partners to suffer, or that their partners' situation just isn't important?
China's economy benefits when their trading partners economies benefit. If it's the former (or even the latter, to a degree), that suggests they have other priorities in mind.
As a native speaker, my only comment after RTFAing is that the phrase doesn't exist in the article. The entire article is about how they use strong handed methods to limit negotiating power of their trading partners. The wording is something along the lines of "With government officials leading the project, we leave them very little bargaining power. Either they give in and offer up their IPs, or they get out. And in the case of Siemens railway, even though negotiations broke down once, they came back for a later round."
Re:Yep, and look at the Airbus A320 (Score:4, Informative)
Russia recently got dinged on the same issue with regard to the Su-27, which they allowed the Chinese to manufacture under license but that the Chinese then copied, and now they're refusing to manufacture [washingtonpost.com] the Su-35 in China as a result.
Re:10,000m curve radius (Score:5, Informative)
Re:Savvy business dealings (Score:5, Informative)
Google "china wind turbine", then come back and see if you want to revise your statement
Re:Can a Mandarin speaker comment on translation? (Score:5, Informative)
The way it's worded doesn't cast those "higher ups" in a bad light (considering every country would prioritize their own economy), but I think it's not entirely unreasonable to also read that as an implicit request to achieve a balance in maximizing Chinese economic benefits while minimizing foreign economic benefits -- that would be the way I'd understand it if I were a shrewed political underling.
Re:Fail (Score:5, Informative)
> this is the difference between a state that has long term goals of improving it countr[y] vs.
> corporations that can't see beyond the next quarterly report.
***China is an elephant that can fly!***
This planet has never seen such an _economic_ rise, not post WWII Europe, not even 20th century USA with its post-war advantage of a devastated first world manufacturing base whilst its own plant was ascendant.
The USA's economic orthodoxy is that attenuated (save Tea Party, Rep. Ron Paul, right wing Republicans) laissez faire, minimal market regulation, minimal market interference, no industrial policy will lead to maximum national economic gains. Since Deng Xiaoping's 1972 market/China opening China has amalgamated Japan's MITI approach (industrial policy) with the West's form of capitalism. In essence they are _demonstrating_ that there is more than one form of capitalism. And their form kicks ass, to the chagrin of western economists and politicos. These Chinese market tactics are if not identical wholly descendant from 1980's Japan Golden Age[1].
BTW, contrary to your quote above, Japan is an economy legendary for putting the long term above ALL ELSE. Yet since 1990 Japan has been in an economic depression that shattered the once indomitable, invulnerable, invincible myth that once was a nation of "Samurai businessmen." I frankly am very surprised at how low Japan's business savvy has sunk. Once upon a time called the 1980s, Japan would do the same sort of thing as in the OP, it would diversify its supply of commodities (1.) to eliminate supplier supremacy and (2.) to achieve lower prices and (3.) gain influence. So, if it needed iron ore, copper ore, petroleum, aluminium, whatever it would set rival nation suppliers against one another---say, Australia, New Zealand, South Africa, Chile, the USA! whomever---for fractional supply quantities. Thusly, low economies of scale would lead to higher cost for Japan, initially, but no one supplier had a stranglehold on Japan. Two, Eventually suppliers would plead for bigger market shares with lower prices for the booming Japanese economy. Three, nations would enact laws beneficial to Japan, nations' indigenous corporations would lobby their governments for infrastructure projects in an effort to ingratiate themselves for future Japanese business or to supply the commodities needed for said infrastructure projects, etc. But now I see that Japan, like the rest of teh globe is a decade away from weaning themselves away from and is presently on bended knee kowtowing to China for rare earth exports. THAT! gentlemen would never have happened to the 1980s Japan. The master is getting tutored!
So I remind you that ***China is an elephant that can fly!***
The planet has never seen a nation rise from so low ECONOMICALLY to so high. Mind you the Middle Kingdom (China) is a nation of deep cultural depth. Reaching back millenia! They are not they were not ignorant not last century, not two three centuries ago either. Think of the Communist Party as the last in a succession of Emperors. China has had them all along its history, some have lasted centuries, some have lasted fifty to ninety years, some have not even been Chinese but barbarian. The communist nation is only sixty-two years old. Their modern ascendancy is thirty-nine years old. Will it last? Will it keep flying? Will the Chinese subsume their liberty to the Party for another sixty-two or thirty-nine years? Even Japan looked unstoppable. Once. It makes an omelet out of our American, western, libertarian, Tea Party, Austrian Economic school orthodoxy.
[1] "Dogs and Demons: tales for the dark side of Japan", Alex Kerr, 2001. A never seen analysis (by a long time nipponophile) in the western press on the cultural, economic, spiritual, ecological malaise of Japan.
Re:Savvy business dealings (Score:2, Informative)
Replying AC to preserve moderation, but the West has most certainly not been "fucking with China" for 600 years. 600 years ago, in 1410, the West was in the midst of the dark ages, with the Enlightenment still some 200 years away.
On the other hand, China was prospering nicely under the Ming dynasty, with say, Zheng He's travels as one example of how rich China was at the time (and no, Zheng He did not discover America, contrary to Gavin Menzies' book).
By the time the west arrive in China in any serious, meaningful way, China is one of the world's largest economies, and that's precisely why the west were there, they wanted access to that market. The west didn't have much that the Chinese wanted, beyond naval technology.
Jumping forward to the later Qing dynasty we have the Opium wars - yes this is the west fucking with china. You won't buy anything from us, so we'll sell you opium. So the Opium wars were bad. Of course the 19th century in general was pretty bad for the Qing, they had four rebellions to put down throughout the century including one that had an estimated 20 million casualties (conservative estimate), the Opium wars, the Sino-Japanese war, and wrapping up with the Boxer Rebellion. Yes at this time, the West was technologically superior to China, but from 1850-1920 (or so, maybe a little later, but really the west was done in china by 1920) is hardly 600 years of fucking with China. There are many reasons why the Qing was ill-equipped to deal with the changes of the 19th century, but your vision of the west as this powerful force which dominated China for 600 years is simply untenable.