So the chinese government is a systemic supporter of the theft of intellectual property of western companies. This happens in two ways primarily:
- By forcing companies that want to set up shop in China to create joint ventures with Chinese companies (either state owned or private, connected companies) or
- By not pursuing or prosecuting hackers who steal western technologies.
This is effective because something along the lines of 468M Chinese subsist on ~2 USD/day, and are hungry for work. By stealing western technology, they can bring products to market with minimal research/development costs. An example is Nortel, a canadian telecom company. Chinese hackers stole their technology recently and they are now bankrupt. Most foreign companies that have technology in China that is critical to their operations either create wholly owned ventures or keep their tech offshore.
What do you guys think is the best way to counter Chinese theft of IP? Is there any way? Is the chinese system/its people inherently prone to theft and corruption/exploiting others? Is the only way to deal with this to make information more secure? Will Chinese culture evolve to the point of making it more societally acceptable to prosecute and look for hackers?
Well, after WW2, the US did not simply steal german technology, you stole their scientists! Wich by the way, is worse on the scale of theft.
Now when it comes to counter measures to the Chinese theft, it's pretty straight forward. Simply create a better economic environnement in your country (cut spending so you can afford permanent tax cuts and lower regulations) and companies around the world will fly back to the US.
But I understand the general frustration about it. If I was a researcher who spent months developing a new tech and it get stolen, I'd feel like dropping a nuke on them.
So yea, here you have it, either improve your economy or nuke them. If you want to break Chinas' back, now is the time.
Wow, this has to be the dumbest comment of February 2012 on WSO. Congrats.
Really? Feel free to open a thread about it so we can confront our arguments =)
Oh, come now Abdul, isnt that being a little harsh? We didnt kidnap their scientists - a lot of those guys came of their own free will - they wouldve been executed as war criminals or whatnot over there.
In terms of the solution, why is the solution to "create a better economic environment"? The problem is that they have lower costs for production. If they steal the manufacturing knowledge for a new type of widget, they can go and hire some of their 468M people who live on 2 USD/day for much less than Americans would ask. We have an environment that creates new development, they are propping themselves up by theft - its not exactly that they are creating a more competitive economic environment on a level playing field, unless we could steal something back of equal value from them, which we cant, and which besides the fact is wrong.
lol yea wtv you seamonkey.
You cain't deny that alot of the German/Nazi military tech was copied by the US (e.g. the B2 bomber).
Simply because if you cut alot of spending to lower taxes + regulations, your production costs will shrink dramatically. Companies will come back to the US and won't have to do the join venture thing in China (eventhough some will for market penetration).
Remember, at one point of your history, the US had the cheapest products in the world, while being the best products in terms of quality and US employees had the highest salaries in the world. And that point in your history is when the size of your governement was tiny, almost no income tax and low regulations.
Right, but remember, they are buying your debt. Wich in turn allows your governement to pay his bills.
You have a few options.
1) Seize international Chinese assets through the courts renumerative to the value stolen. - Of course, they can just start nationalizing Western assets within China.
2) Permanent company bans from Western markets when Chinese companies utilize stolen technology. - Retaliatory strategies could be used against Western companies in China.
3) Retaliatory tarriffs on all exported Chinese goods to the West. - The reverse could be done to Western goods. This is also counterproductive - force US consumers to pay more but then give the money to the corporations that it was stolen from? This is a extremely regressive taxation policy.
4) Treat industrial espionage as an act of war. Complete naval embargo. - Downsides are quite numerous.
Hard to give real solutions - but this I know: Stealing 1 Trillion dollars of knowledge capital from the US is theft and should be punished.
That's fucking stupid. The problem described isn't Western companies leaving the US to go to China. Companies are making rational decisions to partner with Chinese firms for market access.
The problem, primarily, is Chinese companies stealing Western IP directly off of Western computers/databases. That needs to be punished.
Abdel has a good point. The U.S. is not above stealing others' ideas. Furthermore, the environment here basically pushes companies out if they can find cheaper means of production elsewhere. No one comes to this country to produce, they come here to develop. We have excellent resources for product development, but china has the art of cheap production on lockdown.
Until the Chinese realize the effects of their dangerous currency devaluation, their stealing of ideas will continue to be standard procedure because they can capitalize on those ideas so cheaply. Hopefully as their technology evolves, they'll transition from production to development/high-end manufacturing and stealing ideas will become a thing of the past.
This all assumes, of course, that their government doesn't fuck it up.
nbd, just don't pay them back for all the US debt
Honestly, I think there are many paper solutions. As for as those that will actually work to an effective extent: zero. As you said, the motivation for China is simply not there. I read an article in FP that discussed China's culture when it comes to matters such as these. It's very different. To paraphrase: In the West: stealing is wrong. In China, if you can steal from someone, and get away with it, good for you. It's the victims fault for not being smart enough to avoid it.
I sort of think along the same lines, but in reverse. I have never done anything illegal, and never will. For instance, one time, I came home tired as fuck and fell headfirst onto my bed. When I woke up, I realized that I was robbed. I was mad as hell, but I realized that it was my fault. Criminals are stupid, soul-less creatures, and I should have expected nothing less from them. I should have installed that deadbolt I have been meaning to for the past several weeks.
Conclusion: The US should increase it's defenses, and operate under the assumption that China (and countless others) are trying to steal our shit.
Chinese companies have a penchant for violating WTO rules or SEC regulations for the matter.
Abdel/Elephonky, I think were getting off topic here - we should focus on what to do to STOP China from condoning theft. Instances of theft may have happened in the US, but we dont condone it in the way the Chinese government does. Companies in the first instance I described, I have less sympathy for because they decide its in their own interest to go in to the Chinese market knowing their technology will be taken and used by the Chinese without recompense. Its the second category which I am worried about.
If you would like to condemn instances of American companies stealing IP, I whole heatedly support that - but I dont want to get away from the fact that it is wrong. So we all agree that it is wrong, no matter who is doing it - we should be figuring out how best to deal with the problems as they exist.
I think we should also keep in mind that manufacturing in the USA is up from a couple of decades ago. We just do it more efficiently now, so we need fewer workers.
In terms of the danger of currency deflation I agree that this is a major issue - do you think that the Chinese regime can continue on its current path indefinitely? Several hundreds of millions of Chinese have lifted themselves out of poverty in the past few decades thanks to more economic opportunity, but Im not sure there is the historical precedent for thinking the Chinese want freedom in the same way Americans seem to, and its definitely possible that the government could continue to support IP theft.
Yes well, that type of spying can be considered as an act of war. Here's the problem : China is propping up the US by buying it's debt. And the debt they're holding is short term (i.e. they can simply not roll it over).
So, on one hand, you have the US trying to retaliate via sanctions for the chinese spying. On the other hand, you have China who is probably telling the US, if you try to distrupt us in a serious way, we'll not roll over your debt.
That is why I still think that, by creating a better economic environnement in the US, there will be more wealth created inside the US and less in China. This in turn will ease the economic tensions and the threat of China not buying up your debt won't be a problem, i.e. you can go ahead with anti-spying sanctions.
Obviously, easier said than done, but it is feasible.
The sad thing is this: they have nothing of value that we can steal.
A good dollar devaluation is probably what we need anyway.
Not sure about Abdel, but I definitely wasn't justifying China's theft of IP by saying the U.S. has done it. I was merely getting at the fact that many countries go through this period when they're developing. We did it with Britain, China's doing it with us. The point, I suppose, is that the U.S. is at the peak and China isn't. Therefore, until China is at the peak of innovation, it only benefits them to steal ideas from countries who are.
On the deflation - it obviously can't last forever. They're hurting their own people by constantly deflating the yuan and impacting any market for imports (by emphasizing their exports). Several hundreds of millions of Chinese have only lifted themselves out of poverty relative to China's population; they're still dirt poor compared to the world. Once China stops the consistent devaluation (which they'll have to at some point), many Chinese will be thrust back into poverty as their domestic products increase in price and imports into China become more competitive.
Yeah, great idea. Inflate our way out of the hole. China is already under near constant currency depreciation, making the dollar appreciate relative to the yuan and making so-called "inflation" nearly impossible. Face it: until China stops cheating the system (by devaluing the yuan), our debt cannot be easily gotten rid of.
Devaluation, as far as I know, is the incorrect term when referring to the dollar, since it is the world transaction/vehicle currency and thus cannot be directly de- or revalued. Dollar depreciation, on the other hand, is quite possible; however, this requires a direct appreciation of other world currencies, including the yuan, which China steadfastly opposes.
In essence, you're right: a good ol' dollar "devaluation" (depreciation) is EXACTLY what we need, but it won't be happening so long as China can devalue the yuan.
I think tariffs percentages should be so steep on Chinese goods that they are forced to relinquish control and go to a free float.
In no particular order, the dodgy shit that the chinese do:
Steal patents, from the patent filings. Companies are no longer obtaining patents, because it makes it public. Especially defence contractors.
Currency manipulation: obvious
Buying up large chunks of Africa, exporting peasants to work there.
Yeah good idea PetEng,
The minute we try to threaten them by inflating, they will sell of all some $3 trillion of our debt causing fucking world wide financial panic as our sovereign debt is worthless. Then the U.S. Government can`t even issue debt anymore as nobody would be interested in buying it and the fucking government will be insolvent.
Oh thats if Obama doesn`t tax us to hell.
Some pretty pictures: http://www.zerohedge.com/article/fed-balance-sheet-hits-new-record-255-…
Some pretty pictures: http://www.zerohedge.com/article/fed-balance-sheet-hits-new-record-255-…]
China poised to overtake India as world’s biggest gold market this year
http://www.washingtonpost.com/business/china-poised-to-overtake-india-a…
US Trade Commission just puts embargoes on all violated patent products................yes they can do that......and no, no other organization tells them they cant
This. Nothing else needs to be done.
I saw General Michael Hayden talk about US security. http://en.wikipedia.org/wiki/Michael_Hayden_(general)
He said that every country tries to steal our secrets. China is the only one that tries to steal everything.
It boils down to companies being very behind in internet security. Not like it makes a huge difference, given the intrinsic lack of security with the internet.
http://vimeo.com/16031271
Very interesting piece, thanks for mentioning it. I emailed Hayden and he pointed me in the direction of this PDF on the subject:
http://www.ncix.gov/publications/reports/fecie_all/Foreign_Economic_Col…
Why dont we just start stealing their shit. Like seriously start steaing their money electronicly.
we are. it's called QE I, QE II, operation twist.
not too sharp for a guy supposedly worth $50 million.
I was talking about direct offensive hacking. Not devaluing our dollar and ripping of their government. Besides the more we devalue the dollar the more we have to borrow from them so your point is not really valid.
during the 18th century the early american state offered bounties to british engineers to come over to the US with smuggled materials and methods. this is an old game. we are just losing it.
lol @ this thread.
The richest of Chinese and government officials are parking their assets in the US.
The best of the Chinese minds/engineers are studying here in the US.
Why complain? Get rid of the bamboo ceiling and those intellectual capital will never return to China.
The sad thing is, nope, won't happen, can't trust the Chinese. So they just come here, use our educational resources, go back to China to make it a better place.
No curry ceilings tho...
Spoke with one of my engineer friends who works in defense (company also has commercial divisions). Said a manager went and looked at a Chinese supplier. Saw that they had exactly the same design for a product as them. All the way down to chip design (not a reversed engineered ICB). We're talking about complete access to design files.
This is essentially skipping 10+ years of R&D. A massive transfer in wealth that should be punished.
There is no argument here. The German scientists were mostly desperate to come to the United States because the alternative was slave labor under Stalin--that or execution. Besides, German technology wasn't private intellectual property. It was technology from a conquered state. There was no intellectual property theft--it's called the spoils of war.
Once again, your comment was easily the dumbest comment of February 2012. You should be commended.
lol what are you talking about? Alot of them were literally abducted by the British and the US
Learn more here: How T-Force abducted Germany's best brains for Britain http://www.guardian.co.uk/science/2007/aug/29/sciencenews.secondworldwar
Spoils of war? Following your logic, why give back the expansive paintings stolen by Germany to the jewish families owners? Let the nazi commander's families keep those objects.
Here you have it Seabird. Following VT4 logic, the US is currently in a currency/commercial WAR. So, I guess China can do whatever it want, it can fall under the spoils of war.
And please VT4, if you're going to continue to be impolite, stop talking to me.
You're an absolute and utter moron. What don't you get? Intellectual property is a PRIVATE PROPERTY concept. Stealing military secrets IS NOT INTELLECTUAL PROPERTY THEFT and would have nothing to do with trade, trade violations, patent infringements, trademark violations, or lawyers. It's called WAR. China and the United States, as far I'm aware, are not at war--they are trade partners. Even so, the primary German scientists, such as von Braun, who was basically the father of NASA, CHOSE to surrender to the United States rather than the Soviet Union. As a result, he became a beloved, national celebrity in the United States.
http://en.wikipedia.org/wiki/Wernher_von_Braun
Honestly, your assertions are so moronic that they really shouldn't have even merited a response. Comparing Chinese IP theft to America's use of German scientists post WW2 is so moronic that it's breathtaking.
I don't see China agreeing to stop the currency peg in a million years. It benefits their export industry too much. Also, increasing tariffs that high has many far-reaching implications that are undesirable. America can't produce low-level manufactured goods as cheaply and efficiently as China can. If tariffs like what you suggest were put in place, my Nike sneakers would increase ten-fold in cost, the iPhone would cease to exist here, and most consumer electronics would see massive increases in price. In other words, huge tariffs are the worst possible plan of action.
Not to mention the obvious expectation that China would quickly return the favor and cut off their middle class from all of the wonderful American/European luxuries that are being imported at increasingly high rates.
Dude, take a chill pill. This is an internet forum. Abdel's comment was all but lost in this thread except for the fact that you decided to take tremendous offense to it. Let it go.
Drop the hard peg or we tax your goods 50%.
They'll drop the hard peg.
Well, once again, you feel the need to insult me to try to prove a point due to your lack of solid arguments.
As far as I'm concerned, those military secrets where the property of the German Military/Governement.
The military owns the information it produces, just as a private individual owns a patent or a copyright. Those who steal it are guilty of theft. Property rights apply to everyone.
For the Nazi scientists who got abducted, I just showed you a link that exposes the PROGRAMS putted in place by the US & Britain to kidnap those scientists and you try to disprove that by pointing to one example that is not representative of the whole situation.
Sorry Seabird for polluting your thread.
you morons.
this CNY peg is the only thing preventing inflation from going ballistic in the US.
the chinese works 18 hours a day and saves half his pay so the american can relax 18 hours a day and spend twice his pay. for the american to be pointing his well-fed finger at the chinese and claim victimization for himself is the height of stupidity and ingratitude, not only toward the poor coolie who has to work himself to death so we can be fat and lazy, but toward the masters of US geopolitical strategy for making this bizarro world arrangement possible.
^^ Exactly.
If China do not peg anymore, they won't have to print as much to buy up the USD = less inflation in China = purchasing power of the chinese people go up = they'll consume more and export less = chinese products will cost more in the US. Also, since the chinese won't buy up the USD as much, the USD will fall wich in turn will make the US imports more expansive.
And we have to remember that the factories are in China .
I'm pretty sure that behind closed doors, Obama is begging the chinese not to depeg.
fixing our debt problems by turning us all into paupers? are you looking forward to paying $500 for a gallon of milk?
Ok . . . first of all the Chinese, with the exception of those who own small shops or are slaves at the Big 4, most certainly do not work 18 hours a day.
Second . . . do you really think the majority of Americans relax 18 hours a day? I mean, I despise those who receive entitlement benefits and just sit on their asses, but are you really going to stereotype Americans like this? Third . . . you used the word coolie. WTF?
please unclench your sphincter.
melvvvar is correct PetEng. Just think on it...
Besides, it is unjust to punish fiscally responsible people for not acting like white-trash/hood-rats and buying shit worth 10x your income.
^ ah you are slowly figuring it out.
it's ok, just admit you were wrong, then kindly fuck off.
You cannot build a house on sand and you cannot build an inventive industry on leap frogged and stolen ideas.
China NEEDS to grow to placate their population. They also have massive pollution issues. As wages increase and environmental standards get stiffer, American companies will stop going to China. The Chinese have serious issues that people seem to miss.
I am more worries about the US losing its inventive and ingenuousness ways than China bootlegging technology.
Umm, hello. We are going to suffer regardless. The suffering will be far worse if the peg continues for a longer period of time. That's how these massive distortions work. They become so large it becomes too hard to pay the piper.
Define "destroy" the USD. Describe the value of the dollar to a few different currencies. I think you are overstating the effects. Where exactly are people going to go? The Yen? Euro? Right...
That is obvious. The question is, do you want to suffer with a ''$16T'' debt or a ''$20T'' debt.
It's the total opposite. China peg is what is allowing the US to maintain their phony economy based on consumption of foreign goods financed with borrowed money.
[quote=PetEng] Define "destroy" the USD. [quote=PetEng]
It depends on how much you inflate, it's a bottomless pit. Zimbabwe had those $100 Trillion zimbabwean dollar bills and you could only buy an egg with it.
[quote=PetEng]Describe the value of the dollar to a few different currencies. [quote=PetEng]
It is almost worthless to compare paper to paper if both are being printed. Maybe the USD/Euro relationship won't change much, but as they fall, everything around them will raise (commodities prices etc.).
[quote=PetEng]I think you are overstating the effects. Where exactly are people going to go? The Yen? Euro? Right...[quote=PetEng]
It depends on how much you inflate, it's a bottomless pit. Zimbabwe had those $100 Trillion zimbabwean dollar bills and you could only buy an egg with it.
It is almost worthless to compare paper to paper if both are being devalued. Maybe the USD/Euro relationship won't change much, but as they fall, everything around them will raise (commodities prices etc.).
People with money will go to real assets (land, real estate) and real money (gold, platinum). People will less money will play catch up and will buy silver. When this scenario starts unfolding, silver prices will shoot up to pluto.
comment deleted.
So we are agreeing, then?
We shouldn't be living above our means using Chinese financed debt and an artificially strong US currency. The longer this goes on the more painful it will be to unwind. Stop the bubble before it gets bigger.
Adapt or Die, people know what is a quality good worth there money and what is some cheap knock off.
Companies should just brand better and stop whining about competition.
My prof keep telling me that what is important is the ratio relative to GDP.
Here's the problem:
The US GDP is 70% consumption based on borrowed money spent on foreign goods.
So when the GDP goes up, chances are, the debt and the trade deficit goes up too.
And as the situation worsen, people will consume alot less = GDP will come crashing back down to earth in a heartbeat.
Well, you shouldn't live beyound your means, that we can agree on.
However, you will need a strong USD (i.e. keep high interest rates until the level of savings in the country is good enough). It will make your imports much cheaper (for equipement etc.) wich will reduce your costs when the US will start producing again. Most countries with a strong currency are net exporters.
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