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."
10,000m curve radius (Score:4, Interesting)
One of the points mentioned is the desire to design for a 10,000 meter curve radius! Now that takes aggressive land acquisition.
Re:Yep, and look at the Airbus A320 (Score:4, Interesting)
Re:capitalists take note (Score:2, Interesting)
show me where i am wrong and you have effectively opposed my points. however, just attacking me personally means you have nothing to say against my points, and therefore my points are correct
Re:Savvy business dealings (Score:5, Interesting)
Step back for a second and look at what's happening.
On one hand, the companies giving up their seed corn aren't being forced to literally at gun point. They're deciding that at this moment, they're better living another day and starving tomorrow. So in a sense it's a win-win scenario.
On the other hand, the enterprise benefiting from this exploits government backing to take a longer term view of the transaction than the companies developing the technology can afford. So in a different it's not a win/win scenario; it's a win/minimize-your-losses proposition.
So China wins here not by being more ingenious or creating new knowledge or technology, but by exploiting its ability to control the rules of the game. If you twist your vision enough, I suppose that what it is doing in this case might look like innovation.
China is a nation with tremendous human resources and ingenuity, but it *also* exploits the fact that it is the only major economic power on earth still pursuing a kind of mercantilist trade policy.
Re:capitalists take note (Score:5, Interesting)
intellectual property IS a joke. as you can see, the chinese have proven to you what a joke it is. the way to fight the chinese is to only do business with them and only allow their business into your country, as long as their business abides by certain standards, such as worker's rights. supporting intellectual property is not an effective strategy
furthermore, intellectual property is a concept that the chinese will just as happily wield against those in the west when their power is entrenched enough. the very idea of intellectual property is exactly the sort of anti-capitalist rent seeking monopolistic practices autocratic corporations like the chinese government engage in, that should be opposed, in the NAME OF capitalism and free markets
Re:Savvy business dealings (Score:4, Interesting)
It's actually very different from how other countries work because of the centralized acquisition program.
Still I think that this approach is only an incremental step. The Chinese may have the end technology, but it doesn't buy them the ability to develop new technologies. That is a whole different ball game.
Re:capitalists take note (Score:2, Interesting)
Likewise China's rise is largely due to a billion people working as hard as they can to make the country (and their own lives) the best it can be. If Americans (speaking in generalities) had the same resolve/objective world politics would be a lot different right now. But from my own experience, the vast majority of our work force is seeking to live a comfortable life while contributing as little as possible to the greater organization, citing rhetoric similar to the above, but toned down.
I don't really know what to say, if you have one group of people trying to be as lazy as possible, and another group of people trying to become as strong as possible. The latter will always win. Blaming corporations, capitalists, or politicians won't change that fact.
Honestly I think it would be good experience for everyone in the US to start a business, hire a bunch of employees, and see how fun it is to put up with a bunch people constantly shirking their responsibilities to go have fun, and then blaming you (as the immoral, omnipotent, profit-seeking, villain / business owner) for every bad thing that happens.
Industrial Policy (Score:5, Interesting)
It is more than just savvy business wheeling and dealing, since it's the Chinese government wheeling and dealing. Which means it's a monopoly: only the government agency can negotiate for that business inside China. And only the specific Chinese corps the government picks can get the business. Those picked corps are picked not necessarily for the best interests of China, but rather for whatever is in the best interest of the government officials with the power to pick them. Which might or might not be the best interests of China. That's Communism.
But it's also industrial policy, which is indeed savvy business wheeling and dealing. The US doesn't have anything like that, except for the corruption part where some industries have orgs that lobby our government to do business with foreign governments that require their government to mediate such international trade, or where the US government does occasionally require our government to play that role in foreign trade, where the orgs use some method other than competitive bids/RFPs to pick which members get the business. The US could have an industrial policy as effective in strategy as China's extreme one, but without requiring the government to actually conduct the negotiations. Just review the completed deals to ensure they comply with the policy, perhaps just random samples plus any over a large value threshold (which would pay in taxes enough to fund the review).
Instead, the US abandons industrial policy, and therefore industrial strategy. And watches China ascend at our expense. Though the top US capitalists have already invested in China's industries, so China's gain is their gain, while they've divested from US liabilities, so our expense is not theirs.
Re:Savvy business dealings (Score:4, Interesting)
Yeah, this is surprising because everyone expects the Chinese to be the sick man of Asia and a third world run by a regime. They actually did good business. They didn't let one supplier control their train systems while at the same time they built up an indigenous train industry realizing it is vital to their country.
What is surprising that those companies were not able to bribe the select chiefs and get an unfair position, or that some dictator didn't just buy the whole train system and charge it to some world bank loan but though of the future - far far into the future of developing a domestic industry.
And, I wish we had trains for long distance travel in the US. Traveling by car at 70mph for hours and hours is tiring and there is always the prospect of a problem with a car and being stuck somewhere. Airplane travel is marred by the security checks and delays and long wait times.
I guess this would be a stern counter-example to the service industry philosophy. China isn't content on being the factory workhorse while the US controls the technology. China would like to catch up on technical know-how as well and build their own industry.
Re:capitalists take note (Score:4, Interesting)
you have to use your terms more precisely. fascism is a nice scare word, but what you describe as an accepted ideology died in failure in world war ii. you need to update your terminology. i am not interested in debate about how and why fascism is corporatism, i am interested in defeating corporatism. as such, fascism, is just a bugaboo, a scary word, and not a useful intellectually valid concept
what we are really fighting is corporatism, and corporatism alone, corrupting our democracy. the oligarchy in beijing, which will eventually come to own all multinational corporations as their economic power becomes the greatest in the world, will wield their influence through corporations to subvert our democracy
that's the danger
fascism, communism: these are dead terms from the previous century. i will not use those terms because i wish to be taken seriously, and no one serious thinks of the idea of fascism or communism as valid ideologies anymore. one died in 1945, one died in 1990. the year is 2011. update your terminology please. i'm interested in intellectually useful terms, not scary boogeyman words from the dustbin of history
Re:Like college and grad school (Score:4, Interesting)
My understanding is yes to all. But likely not completely. I have family retired from GE loco, years ago they sold around 50 locomotives to China. First 5 were complete shipped from USA, next 20 were increasingly built in china. Last 25 were left to china. So they bought licenses, made changes, and likely wouldn't hesitate to go beyond the license if desired. GE is probably betting they will be ahead of china by the time the contact is done, and that it is beyond china to maintain the ability, let alone expand and compete. Exactly what patents are ment to be, a head start, but not a permanent monopoly (for the inventors).
Re:capitalists take note (Score:5, Interesting)
That couldn't happen, it's bribery by a foreign power! It would be just like President Ford getting a large donation for the Republican Party in person in Jakarta on the day Indonesia invaded East Timor, and the USA reversing their policy on East Timor on that day, even calling them (the same party that runs East Timor today) Communists! Oh wait. When the papers were released in 2005 we found out that was EXACTLY what happened.
Time to start learning Mandarin.
Re:Like college and grad school (Score:5, Interesting)
Ridiculous. The negative side of China's rise to power is not the color of their skin, but the dismissal of human rights by their federal government.
Comment removed (Score:5, Interesting)
Re:Savvy business dealings (Score:4, Interesting)
You can't blame the West entirely. China could have been the preeminent naval power in the 15th and 16th centuries if it had wanted to, but it was even then rotting from the inside and the regime yanked Zheng He back. China had everything it needed to do what Europe did in turn; ships, merchants looking for new markets and ways to avoid the ancient inland trade routes, gunpowder and lots of money. But for whatever reason it went into a tragically-timed period of navel gazing that allowed the Europeans to catch up. Yes, the Europeans did damned rotten things to China, but China has to take some responsibility for the initial weakness.
Re:Savvy business dealings (Score:5, Interesting)
I recall a Marxist argument that the key difference between Europe and China in the period was that in Europe, the bourgeoisie succeeded in resisting the aristocracy and winning a measure of independence -- chartered towns and so forth -- whereas in China, the aristocracy succeeded in keeping the bourgeoisie subordinate. The unsettling implication is that if a ruling class is too powerful, it can enforce stagnation, to the detriment of everyone.
The Marxist interpretation implies that in the present, you need to establish the independence of the working class from all other classes; of course, it's hard to miss that an alternate interpretation is that the independence of the bourgeoisie is the critical issue.
Re:Savvy business dealings (Score:3, Interesting)
... You also somehow ignore that Westerners have been fucking with China for at least 600 years, which until the last few decades effectively set China back about 600 years...
Just to keep the facts straight: Westerners were engaged in fucking China for some 150 years - from 1781 to 1933, Easterners (Japan) started participating in 1894 and then did all the fucking from 1933 until 1945 (which was by far the worst that China got), so Japan gets credit for doing it for 50 years. From 1948 on (more than 60 years) China had been in command of its own policies - nobody has been forcing anything on them and any suffering and ruin has been with the approval of the Chinese government.
Re:Like college and grad school (Score:5, Interesting)