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

[Aepsilons]

Western companies should fight against Beijing’s latest monopoly investigations by following China’s legal procedure, demanding transparency, and getting the facts out.


For more than three decades, Chinese leaders have told foreign CEOs who make the trip to Beijing that they are “friends of China.” In many ways, it is true. It is hard to think of a group that has done so much to bring China into the global economy.

But lately, CEOs of some of the largest Western multinationals are finding that they are not exactly being treated like friends. New Chinese leaders have adopted a far less cordial policy toward foreign businesses operating in China.

The trend actually began a year ago, with Chinese regulators launching “anti-monopoly” investigations against Western baby formula-makers, accusing them of charging excessively high prices. Even though the charges were spurious (the Chinese market for baby formula had over 10 brands), Beijing’s intimidation and harassment forced companies like Mead Johnson and Abbott Laboratories to cut prices to placate the Chinese government.

In recent days, Beijing has expanded and intensified its anti-monopoly enforcement, targeting giant Western companies like Daimler, BMW, Volkswagen, Chrysler, Qualcomm QCOM 0.24% , and Microsoft MSFT 1.23% . Many of these companies could face huge fines if they are found to have violated Chinese law.

Although Beijing’s crackdown may have surprised Western business executives, it is actually a logical complement to the new Chinese leadership’s assertive foreign policy. Since his appointment as the new Communist Party chief in November 2012, Xi Jinping has displayed a much less accommodating stance toward the West. You can see evidence such a shift in China’s willingness to escalate maritime territorial disputes with Japan, Vietnam, and the Philippines, and its open embrace of Vladimir Putin of Russia.

In business, the ethos in China is also changing. Economic nationalism is in full swing. Although no country has benefited from globalization as much as China, Beijing in its heart has little trust in an open trading system. Chinese leaders, including the most senior officials, have often publicly expressed concerns that foreign economic influence and technological dominance is undermining Chinese security. Some of these fears have been translated into policy. The Chinese government has kept Apple’s products off its official procurement list (ostensibly because Apple did not submit its applications on time). Cisco’s sales in China have plunged due to security concerns. The Chinese business media also reports a plan to replace IOE (IBM IBM 0.16% , Oracle ORCL 0.63% , and EMC EMC 0.41% , the three companies that dominate IT services for Chinese financial firms) with indigenous equipment and service providers.

In this context, it would be a mistake to view China’s latest anti-monopoly enforcement as isolated acts. Western firms must have a coherent strategy to defend their business rights and interests in China.

Whenever Chinese authorities harass their companies, Western CEOs’ first instinct is to roll over and play dead. This is a bad idea because, unless their firms have truly violated Chinese law and engaged in internationally unacceptable business practices, such a response is guaranteed to invite future aggravation. Western companies should fight back by following China’s legal procedure, demanding transparency, and using the influence of their trade groups (such as the American Chamber of Commerce) to get the facts out.

To be sure, China’s legal and regulatory systems are totally subservient to the Communist Party and will not likely rule against the government. So, the most effective defense is a vigorous offense: if Beijing’s anti-trust enforcement actions have no merit, Western firms should lobby their governments to threaten tit-for-tat retaliation.

Thanks to globalization, China now also has immense economic interests in the West—Chinese companies operate in Western countries and are eager to expand. It must be made clear to Beijing that unfair actions against Western companies will result in unpleasant regulatory enforcement measures targeting Chinese firms in the West.

A strategy of strict reciprocity will likely deliver better results than quiet capitulation or private groveling. For all its economic gains in the last decade, China still lags significantly behind the West in technology, brand building, and innovation. While it is true that large Western firms count on China for future growth, China also relies on Western multinationals for upgrading its economy.

It is unclear if Western firms will be willing to band together to protect their interests. Based on previous experience, European firms are more vulnerable than their U.S. counterparts because European governments lack the heft or the will to confront Beijing. Of course, the Chinese government has exploited this vulnerability fully and has skillfully used the divide-and-conquer tactic, first to separate American firms from European ones and then to show favoritism toward firms from one European country (Germany) over those from another (France).

But this time, let’s hope that Western firms will have the guts to tell Beijing that they want to be treated like real “friends of China.”

Minxin Pei is the Tom and Margot Pritzker ’72 Professor of Government at Claremont McKenna College and a non-resident senior fellow of the German Marshall Fund of the United States



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

 

[dray]

Since China has acquired the technological know-how of the western products while manufacturing for the western companies, now they want to push out the western companies from China and market local products made by the same companies that previously worked as contract manufacturers for western products!!

 

[LeveragedBuyout]

Western companies should fight against Beijing’s latest monopoly investigations by following China’s legal procedure, demanding transparency, and getting the facts out.

For more than three decades, Chinese leaders have told foreign CEOs who make the trip to Beijing that they are “friends of China.” In many ways, it is true. It is hard to think of a group that has done so much to bring China into the global economy.

But lately, CEOs of some of the largest Western multinationals are finding that they are not exactly being treated like friends. New Chinese leaders have adopted a far less cordial policy toward foreign businesses operating in China.

The trend actually began a year ago, with Chinese regulators launching “anti-monopoly” investigations against Western baby formula-makers, accusing them of charging excessively high prices. Even though the charges were spurious (the Chinese market for baby formula had over 10 brands), Beijing’s intimidation and harassment forced companies like Mead Johnson and Abbott Laboratories to cut prices to placate the Chinese government.

In recent days, Beijing has expanded and intensified its anti-monopoly enforcement, targeting giant Western companies like Daimler, BMW, Volkswagen, Chrysler, Qualcomm QCOM 0.24% , and Microsoft MSFT 1.23% . Many of these companies could face huge fines if they are found to have violated Chinese law.

Although Beijing’s crackdown may have surprised Western business executives, it is actually a logical complement to the new Chinese leadership’s assertive foreign policy. Since his appointment as the new Communist Party chief in November 2012, Xi Jinping has displayed a much less accommodating stance toward the West. You can see evidence such a shift in China’s willingness to escalate maritime territorial disputes with Japan, Vietnam, and the Philippines, and its open embrace of Vladimir Putin of Russia.

In business, the ethos in China is also changing. Economic nationalism is in full swing. Although no country has benefited from globalization as much as China, Beijing in its heart has little trust in an open trading system. Chinese leaders, including the most senior officials, have often publicly expressed concerns that foreign economic influence and technological dominance is undermining Chinese security. Some of these fears have been translated into policy. The Chinese government has kept Apple’s products off its official procurement list (ostensibly because Apple did not submit its applications on time). Cisco’s sales in China have plunged due to security concerns. The Chinese business media also reports a plan to replace IOE (IBM IBM 0.16% , Oracle ORCL 0.63% , and EMC EMC 0.41% , the three companies that dominate IT services for Chinese financial firms) with indigenous equipment and service providers.

In this context, it would be a mistake to view China’s latest anti-monopoly enforcement as isolated acts. Western firms must have a coherent strategy to defend their business rights and interests in China.

Whenever Chinese authorities harass their companies, Western CEOs’ first instinct is to roll over and play dead. This is a bad idea because, unless their firms have truly violated Chinese law and engaged in internationally unacceptable business practices, such a response is guaranteed to invite future aggravation. Western companies should fight back by following China’s legal procedure, demanding transparency, and using the influence of their trade groups (such as the American Chamber of Commerce) to get the facts out.

To be sure, China’s legal and regulatory systems are totally subservient to the Communist Party and will not likely rule against the government. So, the most effective defense is a vigorous offense: if Beijing’s anti-trust enforcement actions have no merit, Western firms should lobby their governments to threaten tit-for-tat retaliation.

Thanks to globalization, China now also has immense economic interests in the West—Chinese companies operate in Western countries and are eager to expand. It must be made clear to Beijing that unfair actions against Western companies will result in unpleasant regulatory enforcement measures targeting Chinese firms in the West.

A strategy of strict reciprocity will likely deliver better results than quiet capitulation or private groveling. For all its economic gains in the last decade, China still lags significantly behind the West in technology, brand building, and innovation. While it is true that large Western firms count on China for future growth, China also relies on Western multinationals for upgrading its economy.

It is unclear if Western firms will be willing to band together to protect their interests. Based on previous experience, European firms are more vulnerable than their U.S. counterparts because European governments lack the heft or the will to confront Beijing. Of course, the Chinese government has exploited this vulnerability fully and has skillfully used the divide-and-conquer tactic, first to separate American firms from European ones and then to show favoritism toward firms from one European country (Germany) over those from another (France).

But this time, let’s hope that Western firms will have the guts to tell Beijing that they want to be treated like real “friends of China.”

Minxin Pei is the Tom and Margot Pritzker ’72 Professor of Government at Claremont McKenna College and a non-resident senior fellow of the German Marshall Fund of the United States



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

It's easy to see how this will turn into a trade war. The US has accommodated and ignored these abuses for decades, now, but China continues to interpret that as weakness, and presses forward. Currency manipulation, IP rights, dumping--sounds like a campaign theme for 2016. As we discussed in another thread, the only logical explanation for China inviting such a needless conflict is if there is another, more serious [domestic] problem looming, and it needs to appeal to Chinese nationalism in its attempts to overcome that other problem.

If that's not the case, this is a terrible blunder on the part of the Chinese leadership, given how much the status quo benefits China. The benefits of this harassment are few and will only appear in the longer term, while the costs are high and immediate.

 

[dray]

It's easy to see how this will turn into a trade war. The US has accommodated and ignored these abuses for decades, now, but China continues to interpret that as weakness, and presses forward. Currency manipulation, IP rights, dumping--sounds like a campaign theme for 2016. As we discussed in another thread, the only logical explanation for China inviting such a needless conflict is if there is another, more serious [domestic] problem looming, and it needs to appeal to Chinese nationalism in its attempts to overcome that other problem.

If that's not the case, this is a terrible blunder on the part of the Chinese leadership, given how much the status quo benefits China. The benefits of this harassment are few and will only appear in the longer term, while the costs are high and immediate.

Very much possible. I always thought that the recent aggressiveness that is being shown by China to all its neighbors in last 1-2 years is also for the very same reason.

It might also be possible that China might pick up a fight with a smaller neighbor if the internal crisis is that serious, in all probability an economic crisis that can raise serious credibility issues for CCP.

 

[fallstuff]

Western companies should fight against Beijing’s latest monopoly investigations by following China’s legal procedure, demanding transparency, and getting the facts out.

For more than three decades, Chinese leaders have told foreign CEOs who make the trip to Beijing that they are “friends of China.” In many ways, it is true. It is hard to think of a group that has done so much to bring China into the global economy.

But lately, CEOs of some of the largest Western multinationals are finding that they are not exactly being treated like friends. New Chinese leaders have adopted a far less cordial policy toward foreign businesses operating in China.

The trend actually began a year ago, with Chinese regulators launching “anti-monopoly” investigations against Western baby formula-makers, accusing them of charging excessively high prices. Even though the charges were spurious (the Chinese market for baby formula had over 10 brands), Beijing’s intimidation and harassment forced companies like Mead Johnson and Abbott Laboratories to cut prices to placate the Chinese government.

In recent days, Beijing has expanded and intensified its anti-monopoly enforcement, targeting giant Western companies like Daimler, BMW, Volkswagen, Chrysler, Qualcomm QCOM 0.24% , and Microsoft MSFT 1.23% . Many of these companies could face huge fines if they are found to have violated Chinese law.

Although Beijing’s crackdown may have surprised Western business executives, it is actually a logical complement to the new Chinese leadership’s assertive foreign policy. Since his appointment as the new Communist Party chief in November 2012, Xi Jinping has displayed a much less accommodating stance toward the West. You can see evidence such a shift in China’s willingness to escalate maritime territorial disputes with Japan, Vietnam, and the Philippines, and its open embrace of Vladimir Putin of Russia.

In business, the ethos in China is also changing. Economic nationalism is in full swing. Although no country has benefited from globalization as much as China, Beijing in its heart has little trust in an open trading system. Chinese leaders, including the most senior officials, have often publicly expressed concerns that foreign economic influence and technological dominance is undermining Chinese security. Some of these fears have been translated into policy. The Chinese government has kept Apple’s products off its official procurement list (ostensibly because Apple did not submit its applications on time). Cisco’s sales in China have plunged due to security concerns. The Chinese business media also reports a plan to replace IOE (IBM IBM 0.16% , Oracle ORCL 0.63% , and EMC EMC 0.41% , the three companies that dominate IT services for Chinese financial firms) with indigenous equipment and service providers.

In this context, it would be a mistake to view China’s latest anti-monopoly enforcement as isolated acts. Western firms must have a coherent strategy to defend their business rights and interests in China.

Whenever Chinese authorities harass their companies, Western CEOs’ first instinct is to roll over and play dead. This is a bad idea because, unless their firms have truly violated Chinese law and engaged in internationally unacceptable business practices, such a response is guaranteed to invite future aggravation. Western companies should fight back by following China’s legal procedure, demanding transparency, and using the influence of their trade groups (such as the American Chamber of Commerce) to get the facts out.

To be sure, China’s legal and regulatory systems are totally subservient to the Communist Party and will not likely rule against the government. So, the most effective defense is a vigorous offense: if Beijing’s anti-trust enforcement actions have no merit, Western firms should lobby their governments to threaten tit-for-tat retaliation.

Thanks to globalization, China now also has immense economic interests in the West—Chinese companies operate in Western countries and are eager to expand. It must be made clear to Beijing that unfair actions against Western companies will result in unpleasant regulatory enforcement measures targeting Chinese firms in the West.

A strategy of strict reciprocity will likely deliver better results than quiet capitulation or private groveling. For all its economic gains in the last decade, China still lags significantly behind the West in technology, brand building, and innovation. While it is true that large Western firms count on China for future growth, China also relies on Western multinationals for upgrading its economy.

It is unclear if Western firms will be willing to band together to protect their interests. Based on previous experience, European firms are more vulnerable than their U.S. counterparts because European governments lack the heft or the will to confront Beijing. Of course, the Chinese government has exploited this vulnerability fully and has skillfully used the divide-and-conquer tactic, first to separate American firms from European ones and then to show favoritism toward firms from one European country (Germany) over those from another (France).

But this time, let’s hope that Western firms will have the guts to tell Beijing that they want to be treated like real “friends of China.”

Minxin Pei is the Tom and Margot Pritzker ’72 Professor of Government at Claremont McKenna College and a non-resident senior fellow of the German Marshall Fund of the United States



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

The first instinct of a CEO is to protect the interest of the shareholders along with his own shares. He or she will not risk it. GM makes a ton of money in China, so does Apple by making its products in China.

"Why do you rob a bank? Because that's where the money is," says GM Chief Executive Dan Akerson. "Why go to China? Because that's where the customers are." He called the SAIC partnership his company's most important relationship around the world.

Balancing the Give and Take in GM's Chinese Partnership - WSJ

 

[Aepsilons]

It's easy to see how this will turn into a trade war. The US has accommodated and ignored these abuses for decades, now, but China continues to interpret that as weakness, and presses forward. Currency manipulation, IP rights, dumping--sounds like a campaign theme for 2016. As we discussed in another thread, the only logical explanation for China inviting such a needless conflict is if there is another, more serious [domestic] problem looming, and it needs to appeal to Chinese nationalism in its attempts to overcome that other problem.

If that's not the case, this is a terrible blunder on the part of the Chinese leadership, given how much the status quo benefits China. The benefits of this harassment are few and will only appear in the longer term, while the costs are high and immediate.

Its interesting because we both just talked about this in that last thread. Seems like there are murky waters ahead, for both the United States and Japan. This is something to keep an eye on.

The first instinct of a CEO is to protect the interest of the shareholders along with his own shares. He or she will not risk it. GM makes a ton of money in China, so does Apple by making its products in China.

The interest of shareholders are considered especially when the executive board(s) convene on such security issue. Trust me these said issues concerns the interests of the organization(s) and serve as catalyst to conduct Feasibility Studies and SWOT [Strength, Weakness, Opportunities, Threats] analysis which takes into consideration the mid to long term interests of said organization -- and the necessary steps that must be made.

 

[fallstuff]

Its interesting because we both just talked about this in that last thread. Seems like there are murky waters ahead, for both the United States and Japan. This is something to keep an eye on.



The interest of shareholders are considered especially when the executive board(s) convene on such security issue. Trust me these said issues concerns the interests of the organization(s) and serve as catalyst to conduct Feasibility Studies and SWOT [Strength, Weakness, Opportunities, Threats] analysis which takes into consideration the mid to long term interests of said organization -- and the necessary steps that must be made.

Typically Board of Directors are hand picked by the CEO. A CEO will not let the BoD get in between him and the millions in pay including bonuses. In return the BoD gets company perks. Thats the reality. There is a reason behind astronomical CEO pay packages, a typical shareholder will generally vote against such pays.

There was a time to put the brakes on the Chinese, that time has come and gone.

 

[Aepsilons]

Typically Board of Directors are hand picked by the CEO. A CEO will not let the BoD get in between him and the millions in pay including bonuses. In return the BoD gets company perks. Thats the reality. There is a reason behind astronomical CEO pay packages, a typical shareholder will generally vote against such pays.

There was a time to put the brakes on the Chinese, that time has come and gone.

You do know that many corporations are transferring production from China to say ASEAN and South Asia, right?
Feasibility studies have been conducted. The recent protectionist policies in China will lead to very interesting actions by organizations set in China. Don't be surprised if the Chinese Government, which oversees said regulatory bodies in the PRC , eventually want to kick out foreign FDI , offshore manufacturing in China. If the goal is to tap into the domestic market , then, one shouldn't ignore that possibility.

Time will tell and I do like to remain optimistic.

 

[Kolaps]

No need to be genius to know the over-priced product from the Western companies. If this is Europe, these companies already being punished heavily.


Agree with the transparency part.

Microsoft should reveal their source code to make sure they are not working for NSA.


China is very friendly to these companies, but this companies use it to make Chinese people suffer!

 

[Genesis]

It's easy to see how this will turn into a trade war. The US has accommodated and ignored these abuses for decades, now, but China continues to interpret that as weakness, and presses forward. Currency manipulation, IP rights, dumping--sounds like a campaign theme for 2016. As we discussed in another thread, the only logical explanation for China inviting such a needless conflict is if there is another, more serious [domestic] problem looming, and it needs to appeal to Chinese nationalism in its attempts to overcome that other problem.

If that's not the case, this is a terrible blunder on the part of the Chinese leadership, given how much the status quo benefits China. The benefits of this harassment are few and will only appear in the longer term, while the costs are high and immediate.

You need to go to China and feel the atmosphere. It's optimistic, and good. While people complain like we all do, the general feeling is one of pride. I mean these are real changes that you can see and feel.

When I was born, there was no buy and sell of property, no car, a 50 SQ/m apartment and traveling was terrible. When I was a child they literally had to throw me onto the train to board, and we slept in the staff car cause the rest was full. We had to pay extra to the worker, so he/she give up their bed.

Today, we can buy tickets to HSR online, have cars, and a home that's very comfortable. We all had changes big or small happen within a generation.

This Chinese government will fall mentality need to stop. We all face problems. The government is working hard to tackle this problem. Just as the people is, the mentality of people against the government doesn't exist, yet....


Now onto your theory of Chinese leader being insane. When are you going to see, there just isn't enough room for the both of us in some fields. Microsoft, if we don't drive it out of China or at least challenge, where are we going to put 100,000 programmer that would have worked on our own OS, and the advertising executives, marketing, human resources, and much much more.

As China transitions, we need jobs, high paying ones in every field, we can't say 4 years of university you are now useless.

Status quo benefited China yes, but China is now different, we need to use our educated people, they can't be jobless, they need jobs, and the only available job, you already got.

High apartment prices, higher expectations, and greater dreams, just food on the table is no longer enough, it's Prada, it's apartments, it's traveling, it's prestigious job title, it's everything, you would want.

Consider China a protege, we learn everything you could teach, and we are grateful and we benefited immensely, but we want you job now, now that we got the skill, to continue to be under you seems unfair now that we can also do it.


As to some moving their production to ASEAN, Africa, we are also doing that, we are not the small nation we were before, we have factories that would not be seen in the same light anymore, and they need to go, we also got manufacturing that just isn't enough of a money maker to stay in the country.

So this isn't bad, this is a sign of maturity. A lot of Chinese brands are quality, not top notch, but for the reasonable, rather than cut throat price, they can now match quite a few good brands.



Lastly Chinese nationalism was always there, it's just our voice can now be heard, and it only seems sudden. If anything Mao era was much more nationalistic, Mao would have assaulted SCS in wooden boats if they had dared to do what they did today. Mao would have nuked everyone and their grandmother.

But American nationalism also exists, just google China and see the language the news and comment section use against our nation and people.

 

[LeveragedBuyout]

You need to go to China and feel the atmosphere. It's optimistic, and good. While people complain like we all do, the general feeling is one of pride. I mean these are real changes that you can see and feel.

When I was born, there was no buy and sell of property, no car, a 50 SQ/m apartment and traveling was terrible. When I was a child they literally had to throw me onto the train to board, and we slept in the staff car cause the rest was full. We had to pay extra to the worker, so he/she give up their bed.

Today, we can buy tickets to HSR online, have cars, and a home that's very comfortable. We all had changes big or small happen within a generation.

This Chinese government will fall mentality need to stop. We all face problems. The government is working hard to tackle this problem. Just as the people is, the mentality of people against the government doesn't exist, yet....


Now onto your theory of Chinese leader being insane. When are you going to see, there just isn't enough room for the both of us in some fields. Microsoft, if we don't drive it out of China or at least challenge, where are we going to put 100,000 programmer that would have worked on our own OS, and the advertising executives, marketing, human resources, and much much more.

As China transitions, we need jobs, high paying ones in every field, we can't say 4 years of university you are now useless.

Status quo benefited China yes, but China is now different, we need to use our educated people, they can't be jobless, they need jobs, and the only available job, you already got.

High apartment prices, higher expectations, and greater dreams, just food on the table is no longer enough, it's Prada, it's apartments, it's traveling, it's prestigious job title, it's everything, you would want.

Consider China a protege, we learn everything you could teach, and we are grateful and we benefited immensely, but we want you job now, now that we got the skill, to continue to be under you seems unfair now that we can also do it.


As to some moving their production to ASEAN, Africa, we are also doing that, we are not the small nation we were before, we have factories that would not be seen in the same light anymore, and they need to go, we also got manufacturing that just isn't enough of a money maker to stay in the country.

So this isn't bad, this is a sign of maturity. A lot of Chinese brands are quality, not top notch, but for the reasonable, rather than cut throat price, they can now match quite a few good brands.



Lastly Chinese nationalism was always there, it's just our voice can now be heard, and it only seems sudden. If anything Mao era was much more nationalistic, Mao would have assaulted SCS in wooden boats if they had dared to do what they did today. Mao would have nuked everyone and their grandmother.

But American nationalism also exists, just google China and see the language the news and comment section use against our nation and people.

Yes, I remember taking a trip in a sleeping car from Guangzhou to Beijing in the early 1990s, and it was one of the filthiest, most cockroach-infested places I've ever had to sleep (but really, sat up all night swatting), and now when I go to China, it feels just like any other advanced area of the world. I applaud China's progress, and I understand its desire to do more.

China is welcome to compete, of course, but let's say it makes a competitor to Microsoft called COS. How will it be able to sell this operating system outside of China? Other software vendors will know that software they develop for COS will likely be pirated and/or cloned by China, and then resold under its own brand. So outside developers will not develop for COS, and COS will have a difficult time gaining market share outside of China. Attacking Microsoft for monopolistic practices is worse than a joke, given how heavily pirated Microsoft's software is in China. If China were enforcing IP laws and ensuring Microsoft were properly paid, we could have a discussion about whether Microsoft were gouging, or engaged in predatory pricing. But to steal Microsoft's IP and then sue it is a parody of justice.

Isn't the best use of your skilled graduates to engage them in R&D, to develop indigenous technologies that can compete globally, without violating IP rights, and indeed, securing its own IP rights? How does it benefit the highly educated graduates if in violating IP of other countries, those other countries retaliate and limit the export potential of Chinese high technology? I believe you when you say that China has the skills and knowledge to compete. Please show us, instead of undermining that claim by relying on (and appropriating) the work of others.

As I said previously, there are bad American companies, and bad European companies that steal IP as well. The difference is that they can be stopped and made to pay damages through the courts of law in the US and Europe, whereas Chinese courts rarely rule against domestic firms and in favor of foreign firms. When the government explicitly targets foreign firms for attack, it sends a very clear message to all levels and branches of government that foreign firms are fair game. As these tensions escalate, firms that would have employed your engineers and programmers will pull back, because not only is their IP at risk, but even the idea of a level playing field for them to operate is in question. This surely doesn't help your highly skilled graduates.

On the manufacturing side, between the increasing use of robotics, 3D printing, and other low-cost locales like Indonesia, China's lax attitude towards protecting foreign firms makes the choice to shift operations increasingly attractive. This now begins to harm your lower-skilled workers, as factory production is shifted abroad.

Remember, China is an export-led economy. China cannot easily spit in the face of other countries and then depend on the domestic market to absorb any slack that might result from retaliation. I know that times are good in China, and it seems like China can, and indeed should, do whatever it wants as a first-order power in the world. But other countries don't exist to serve China's needs, and they have alternative choices. If China doesn't want to play our game by our rules, that's fine. But after China declares it is not bound by our rules, what happens when we don't want to play the game at all with China anymore? Do you think your good friend Russia will absorb all of those export products?

I hope it doesn't come to this. I hope the Chinese leadership realizes that it's done enough to pander to domestic sentiment, and now it's time to focus on ensuring the economy doesn't experience any disruptions. To ensure that, China should demonstrate that foreign capital is welcome, that foreign investment in China is welcome and the products of that investment won't be stolen, foreign employment of Chinese workers is welcome and won't result in those Chinese workers stealing trade secrets. As I have said previously, this is not a game, and pressure is mounting here in the US about these unfair practices, much like they did against Japan in the 1980s. As you said, we have our own pride, and there are limits to our patience.

 

[Genesis]

Yes, I remember taking a trip in a sleeping car from Guangzhou to Beijing in the early 1990s, and it was one of the filthiest, most cockroach-infested places I've ever had to sleep (but really, sat up all night swatting), and now when I go to China, it feels just like any other advanced area of the world. I applaud China's progress, and I understand its desire to do more.

China is welcome to compete, of course, but let's say it makes a competitor to Microsoft called COS. How will it be able to sell this operating system outside of China? Other software vendors will know that software they develop for COS will likely be pirated and/or cloned by China, and then resold under its own brand. So outside developers will not develop for COS, and COS will have a difficult time gaining market share outside of China. Attacking Microsoft for monopolistic practices is worse than a joke, given how heavily pirated Microsoft's software is in China. If China were enforcing IP laws and ensuring Microsoft were properly paid, we could have a discussion about whether Microsoft were gouging, or engaged in predatory pricing. But to steal Microsoft's IP and then sue it is a parody of justice.

We have to make the OS first, and then continue updating and create the industry first. How do we export without having anything.

Justice? What justice? America bombed our embassy when we helped to shoot down one of your stealth aircrafts in the 90s. Today we are selling weapons, backing Russia, and stopping middle east and Africa intervention, not to mention what you listed IP, and currency manipulation to an extent. You are not going to bomb another embassy are you.

Strength is the best justice.

We don't have IP rights cause it doesn't benefit us as much as it does you. America also did it to an extent pre-Pax Americana, as did Japan.

But you guys all respect rights now right, and so will we, when we get to that point.

It doesn't matter how it makes us look, what matters is what it enables us to do. Nobody will remember how we did it, as long as we could do it.

As to outside developers, they will go where there is money, I mean we are not worse than child slaughtering African warlords are we, and you as well as us still do business with them.

Besides, one day when we made it, we will start to respect IP, just now while we have no much IP under our name.

Isn't the best use of your skilled graduates to engage them in R&D, to develop indigenous technologies that can compete globally, without violating IP rights, and indeed, securing its own IP rights? How does it benefit the highly educated graduates if in violating IP of other countries, those other countries retaliate and limit the export potential of Chinese high technology? I believe you when you say that China has the skills and knowledge to compete. Please show us, instead of undermining that claim by relying on (and appropriating) the work of others.

Innovate, how do we do that? You can't innovate if you are behind, look at all the countries that tried their hand at fifth gen, why are US, Russia and US the only ones able to get a fighter flying and ready for induction. Cause without catching up to the latest standards, you can't really do anything new. How can a grade schooler design a new car.

Can you imagine us doing this 10 years ago if we didn't take some liberties here and everywhere.

I said we have skill, but you are underestimating yourself, America's empire wasn't built in one day, and neither will our rebuilding process.

We don't have much export potential right now anyways, cause our products still haven't caught up much yet. But the thing about a product if it's good, it's good.

As I said previously, there are bad American companies, and bad European companies that steal IP as well. The difference is that they can be stopped and made to pay damages through the courts of law in the US and Europe, whereas Chinese courts rarely rule against domestic firms and in favor of foreign firms. When the government explicitly targets foreign firms for attack, it sends a very clear message to all levels and branches of government that foreign firms are fair game. As these tensions escalate, firms that would have employed your engineers and programmers will pull back, because not only is their IP at risk, but even the idea of a level playing field for them to operate is in question. This surely doesn't help your highly skilled graduates.

Your firms will get over it, capitalists are nice like that. Just as ours also did. I mean one of our largest partner is Japan regardless of what the rhetoric is.

On the manufacturing side, between the increasing use of robotics, 3D printing, and other low-cost locales like Indonesia, China's lax attitude towards protecting foreign firms makes the choice to shift operations increasingly attractive. This now begins to harm your lower-skilled workers, as factory production is shifted abroad.

Remember, China is an export-led economy. China cannot easily spit in the face of other countries and then depend on the domestic market to absorb any slack that might result from retaliation. I know that times are good in China, and it seems like China can, and indeed should, do whatever it wants as a first-order power in the world. But other countries don't exist to serve China's needs, and they have alternative choices. If China doesn't want to play our game by our rules, that's fine. But after China declares it is not bound by our rules, what happens when we don't want to play the game at all with China anymore? Do you think your good friend Russia will absorb all of those export products?

Low skilled worker, maybe, but cost is a funny thing, we got a rail way linking to Germany now, we got experienced docks, good travel, cheap freight, and huge local market. It's something that was created with decades of hard work.

Indonesia maybe, but they don't have the infrastructure now, besides, the local talent level isn't so easily made. Managers, supervisors, experienced workers, you can't just have those in the flip of a finger.

You move a factory, what guarantees your shipment, the worker quality, the transportation reliability, the government regulations, it's not as simple as that.

Also lest we for get, China is a huge part of that supply chain now, can you get the same materials and same services as you would in another country.

People don't choose us because we are best buds, they choose us for a wide variety of tangible reasons.

If we were to say respect IP and lose the edge, you still leave. As long we got the edge, we can pretty much do whatever.

I hope it doesn't come to this. I hope the Chinese leadership realizes that it's done enough to pander to domestic sentiment, and now it's time to focus on ensuring the economy doesn't experience any disruptions. To ensure that, China should demonstrate that foreign capital is welcome, that foreign investment in China is welcome and the products of that investment won't be stolen, foreign employment of Chinese workers is welcome and won't result in those Chinese workers stealing trade secrets. As I have said previously, this is not a game, and pressure is mounting here in the US about these unfair practices, much like they did against Japan in the 1980s. As you said, we have our own pride, and there are limits to our patience.

I seen the limits of your patients, right now you guys dropped sanctions on Russia, a great power, what's stopping you from doing the same tomorrow against us, I'll tell you what, the companies that will dominate globally after we take your technology.

International law and condemnation didn't stop you from bombing our embassy, but our type 094 Ballistic nuke sub certainly did.

You can't even force Japan into TPP now, because Japanese firms are too powerful.

I'm sure you are like me, you like tangible assets, things that we can count on like our own power, not your benevolence, of which you don't have much btw.

 

[LeveragedBuyout]

We have to make the OS first, and then continue updating and create the industry first. How do we export without having anything.

Justice? What justice? America bombed our embassy when we helped to shoot down one of your stealth aircrafts in the 90s. Today we are selling weapons, backing Russia, and stopping middle east and Africa intervention, not to mention what you listed IP, and currency manipulation to an extent. You are not going to bomb another embassy are you.

Strength is the best justice.

We don't have IP rights cause it doesn't benefit us as much as it does you. America also did it to an extent pre-Pax Americana, as did Japan.

But you guys all respect rights now right, and so will we, when we get to that point.

It doesn't matter how it makes us look, what matters is what it enables us to do. Nobody will remember how we did it, as long as we could do it.

As to outside developers, they will go where there is money, I mean we are not worse than child slaughtering African warlords are we, and you as well as us still do business with them.

Besides, one day when we made it, we will start to respect IP, just now while we have no much IP under our name.




Innovate, how do we do that? You can't innovate if you are behind, look at all the countries that tried their hand at fifth gen, why are US, Russia and US the only ones able to get a fighter flying and ready for induction. Cause without catching up to the latest standards, you can't really do anything new. How can a grade schooler design a new car.

Can you imagine us doing this 10 years ago if we didn't take some liberties here and everywhere.

I said we have skill, but you are underestimating yourself, America's empire wasn't built in one day, and neither will our rebuilding process.

We don't have much export potential right now anyways, cause our products still haven't caught up much yet. But the thing about a product if it's good, it's good.




Your firms will get over it, capitalists are nice like that. Just as ours also did. I mean one of our largest partner is Japan regardless of what the rhetoric is.


Low skilled worker, maybe, but cost is a funny thing, we got a rail way linking to Germany now, we got experienced docks, good travel, cheap freight, and huge local market. It's something that was created with decades of hard work.

Indonesia maybe, but they don't have the infrastructure now, besides, the local talent level isn't so easily made. Managers, supervisors, experienced workers, you can't just have those in the flip of a finger.

You move a factory, what guarantees your shipment, the worker quality, the transportation reliability, the government regulations, it's not as simple as that.

Also lest we for get, China is a huge part of that supply chain now, can you get the same materials and same services as you would in another country.

People don't choose us because we are best buds, they choose us for a wide variety of tangible reasons.

If we were to say respect IP and lose the edge, you still leave. As long we got the edge, we can pretty much do whatever.



I seen the limits of your patients, right now you guys dropped sanctions on Russia, a great power, what's stopping you from doing the same tomorrow against us, I'll tell you what, the companies that will dominate globally after we take your technology.

International law and condemnation didn't stop you from bombing our embassy, but our type 094 Ballistic nuke sub certainly did.

You can't even force Japan into TPP now, because Japanese firms are too powerful.

I'm sure you are like me, you like tangible assets, things that we can count on like our own power, not your benevolence, of which you don't have much btw.

I was prepared to write a detailed response until I got to your conclusion. When the sociopath declares loudly and repeatedly that he will kill until he is stopped, he deprives everyone else of peaceful alternatives. We could have peaceful trade with China (which has been enormously beneficial to China thus far), but if China wants a trade war (which would be tremendously destructive to China), it will get a trade war. After all, China gets what China wants, right?

 

[Genesis]

I was prepared to write a detailed response until I got to your conclusion. When the sociopath declares loudly and repeatedly that he will kill until he is stopped, he deprives everyone else of peaceful alternatives. We could have peaceful trade with China (which has been enormously beneficial to China thus far), but if China wants a trade war (which would be tremendously destructive to China), it will get a trade war. After all, China gets what China wants, right?

you keep saying it has benefited us greatly, how did that happen, if not for our liberties with IP.

How can we make Xiaomi, Lennovo, Hai'er, and quite a few other brands.

All you see is these "success," but you never question how we got there in the first place.

You and Russia have sold quite a few countries fighters, why are we the only country capable of developing a fifth gen today with you guys.

Yes, it benefits us, but it benefits us for the exact reason I said. If we didn't learn anything how are we different today than we were 30 years ago.


You really do sound republican, I'm afraid, too black and white, trade war, what trade war. Tough on China, you are not going to do that, and we are not going to go too far.

We could have peaceful trade with China (which has been enormously beneficial to China thus far), but if China wants a trade war (which would be tremendously destructive to China), it will get a trade war. After all, China gets what China wants, right?

lol I'm sure you don't realize it, but me and all Chinese feels incredibly unsafe and uncomfortable for you to have this much power over us.

We will do what ever it takes to not be in this situation.

How would it feel if we had the power of saying, for example in 03 we said you go to Iraq and not only will we sanction you to hell but also defend our ally. I mean if we could follow through.

That's the kind of heat we feel.

 

[FairAndUnbiased]

Isn't the best use of your skilled graduates to engage them in R&D, to develop indigenous technologies that can compete globally, without violating IP rights, and indeed, securing its own IP rights? How does it benefit the highly educated graduates if in violating IP of other countries, those other countries retaliate and limit the export potential of Chinese high technology? I believe you when you say that China has the skills and knowledge to compete. Please show us, instead of undermining that claim by relying on (and appropriating) the work of others.

I hope it doesn't come to this. I hope the Chinese leadership realizes that it's done enough to pander to domestic sentiment, and now it's time to focus on ensuring the economy doesn't experience any disruptions. To ensure that, China should demonstrate that foreign capital is welcome, that foreign investment in China is welcome and the products of that investment won't be stolen, foreign employment of Chinese workers is welcome and won't result in those Chinese workers stealing trade secrets. As I have said previously, this is not a game, and pressure is mounting here in the US about these unfair practices, much like they did against Japan in the 1980s. As you said, we have our own pride, and there are limits to our patience.

To do alot of RD, you have to have access to existing patents. There is already alot of RD going on. It is the typical "building a colony on mars" problem. Lets say you want to build a colony on mars. What do you need? Well, you need air, food, and shelter. That actually means, you need metal plating, machinery, computers, etc. And to get those, you need chips, mills, reactors, etc. And so on, and so on, until you get to the refinery that takes raw iron ore, silicon, etc. and transforms it into steel and monocrystalline wafers - but those refineries need computers, machinery, etc. You have to build things step by step.

And that's what is going on. Things are being built step by step, to accomodate the technological foundation for future innovation, economic success and national security - without being held back by foreign regulations and laws.

See, this is the assumption that you're making - you can cut Chinese people off and Chinese are too dumb to figure it out. Well, you embargoed Chinese in weaponry in 1990; did that happen? In 1994 you said that without "free access to the internet" China will fall behind - did China's scientific and industrial output accelerate or decelerate in that timespan? Reality hits again.