[ctvo]

You are conflating two things in this reply:

There’s the official transfer of technology that happens in some circumstances when a western company wishes to do business in China, that is known and each company makes its own decisions on if this short term trade off is worthwhile.

Americans should be angered that the Chinese, years after joining the WTO, still restrict their markets in this way while enjoying open access to other markets.

This article does not touch the above. It’s about illegal, state sponsored theft of intellectual property. Are you asking why people should be upset another country is attacking companies based in the US and stealing their technology?

[shantanubala]

You're right. I wasn't in any way trying to imply that the Chinese government was acting fairly - they are stealing and ought to be punished.

My confusion stems from the American companies who readily jumped at the opportunity to heavily depend on supply chains inside of a country with 1) a relatively short history in the WTO 2) a previous history of market manipulation and 3) rampant human rights abuses

And let's not mention that the entry into the WTO itself constituted a major overhaul of the Chinese economy, which should in itself be considered an experiment.

I'm disappointed that the risks of trade in China have been understated for so long. And systematically underestimated by American firms.

Or to put it a different way: how surprising is this situation? And does it belie a lack of proper enforcement and a lack of understanding of the risks of doing trade with China?

It feels silly to only examine the narrative where the Chinese government is at fault because that narrative is obvious. What about the culpability of our own government for advocating for China's entry in the WTO? Or the immediate handoff of trade by American corporations when the decision produced short-term gains without examining how many rapid changes China was making to its economy?

[ericd]

I would say that the conditions the Chinese government sets are structured to exploit a large structural flaw in the American economy, in that the decision makers in most large companies are highly incentivized to achieve short term results even at the expense of long term. So the Chinese government offers to reward those decision makers handsomely in the short run, in exchange for essentially selling the tech lead the US has enjoyed and which underpins much of the value of US enterprises.

[linkregister]

American companies, such as K-Mart, which failed to follow their peers (Walmart, Target) into setting up supply chains in China, ended up in defeat.

There are counterexamples, but most companies seeking to wait this out did not flourish.

"Markets can remain irrational longer than you can remain solvent" - Keynes

[prewett]

From a consumer perspective, K-Mart was failing before everyone started rushing to China. And Walmart's US logistics was way ahead of everyone else, which is what enabled them to have lower prices. Target succeeds due to having products that actually look good, as opposed to Walmart, whose style is distinctly lack-of-style. I remember going to K-Mart, and Walmart easily beat them without needing to go to China.

I'm not sure I see what kind of supply chains Walmart has in China, since it mostly sells other companies' goods. Maybe it produces the house brand (can't remember the name) in China itself, but I wouldn't be surprised if it outsources that.

[ericd]

Lack of a China strategy had very little to do with why K-Mart imploded afaict. Read a bit about Lampert’s strategies if you want to get a sense of the reasons there.

[est]

It goes both ways. Why doesn't Mexico have a IP "theft" problem? Because they are only capable of labor outsourcing.

China on the other hand has a complete domestic industry, they can make everything from tiny screws to atom bombs. There are only handful of countries can do this, if I recall correctly only USA and China. These countries' government has a long term goal of a self-sufficient, independent economy in case of doomsday scenario. Rest of the world depend on each other somehow.

Thus China kinda have an strong domestic supply chain. And it would be foolish not to copy because you have the productivity and scale advantage.

[coliveira]

I wouldn't count the US among countries that can produce anything. Of course things can change, but right now the US doesn't produce most things that are consumed internally, and it has been like that for more than a decade.

[ericd]

I’m not saying they shouldn’t try, just commenting on how I see their attempt being structured to exploit a weakness in US companies, which the US govt. should probably try to patch via law.

[oldandtired]

> You're right. I wasn't in any way trying to imply that the Chinese government was acting fairly - they are stealing and ought to be punished.

The Chinese government is doing nothing different to the USA government. So, of one accuses the Chinese government of acting unfairly, then one must also accuse the USA government the same way. The Chinese government is only acting in the same manner as the USA government.

If the Chinese government is "stealing and must be punished", then so to is the USA government and the same punishment needs to be handed out to the USA government.

The actions being discussed are common to all governments (and a lot of companies as well) and if you want things to change then you have to take seriously your responsibility to bring about change in your government.

I am no fan of the Chinese government and I am no fan of the USA government. From my perspective, they are both acting in the same manner and are both causing serious damage to the world in all sorts of ways. But that is a discussion for another time and place.

[notSupplied]

Sure, the US government engages in espionage. But there is a huge difference between stealing the specs of the latest Chinese fighter jet so you know how to engage against them, and stealing in order to hand it off to your own domestic industry to give them an edge.

[majia]

The US does conduct espionage to help its political and economic negotiations. Its goal is to give us industry an edge too. The US isn’t performing commercial spying simply because there isn’t much valuable staff for it to steal. It’s rather hypocritical to critize one form of espionage and think the other forms are ok.

[oldandtired]

I am not talking about espionage. I am talking about the situation where the US government takes what someone who is not a US citizen and located in another country has spent two decades privately working on a technology and then when patenting it, is informed that not only has the US government taken the use of the technology but if he speaks on the details of that technology in any public way, he will be imprisoned. No objections allowed, no payments received, only punishment if he discusses the subject matter.

As I have watched him do this research and development over those two decades, I recently asked him how it was going. He only response was the above and he would not discuss further that technology to protect me, my family and his family from any repercussions.

As I have come across this kind of activity before, I take the entire "stealing of intellectual property" concept as something that governments like to indulge in and like to accuse others of the "heinous" action while trying to appear as lily white innocents themselves.

YMMV, but as far as I am concerned China is just the new USA.

[walterbell]

Article on patents and secrecy orders: https://www.wired.com/2013/04/gov-secrecy-orders-on-patents/

[oldandtired]

The problem here is that the USA government thinks that it is above the rules of every other nation on earth. When any other national government pursues the same actions as the USA government, you really cannot complain unless you complain about them all.

So back to the point of the Chinese appropriating knowledge for Chinese use, unless you want to complain about the USA government leading the way in this area, there is nothing to complain about.

You might not like it but if you want to say there is a "moral" difference between the actions undertaken by both governments, you really are on very thin ice, so to speak.

[oldandtired]

> It’s about illegal, state sponsored theft of intellectual property. Are you asking why people should be upset another country is attacking companies based in the US and stealing their technology?

It is state sponsored appropriation of knowledge not "illegal state sponsored theft of intellectual property". The USA government sponsors this kind of appropriation of knowledge all the time, so why is anyone upset when the Chinese government (or any other government for that matter) does this?

This is simply a fact of life and has been the action of governments and other organisations for millennia.

[ctvo]

You need to post a citation where the US government is actively sponsoring hacking of systems owned by private companies with the aim of stealing their IP to give US based companies an economic edge.

There is no analogy here between the US, EU, et al and China until you provide this.

[oldandtired]

I gave one example of this that I personally know. Over the years I have seen this same scenario discussed by all sorts of people (business owners, technologists, etc). It various ways, this has even been discussed by the IEEE.

Whether you want to acknowledge the sameness of the USA government to the Chinese government in these areas or not, the Chinese government is only following in the well trod footsteps of the USA government.

The USA as a whole had a foundation that was extraordinary, but this foundation has been well and truly eroded in the last couple of centuries. What's the applicable phrase? Oh yes - "Oh how far it has fallen and knows it not."