“It makes more sense if China wants to protect the Chinese consumer.”
No, it doesn't. Just like every other neoliberal economy out there, since when has China's government started caring about the consumers?
The Chinese government is "punishing" Qualcomm for monopoly, yes, but it has nothing to do with the consumers.
"fueling concern that the country -- the world’s second-largest economy -- is using such inquiries to boost its native enterprises."
No shit. Look at all the local clones/"competitors" that have started doing very well after the original companies have been eliminated from the market (Google, Dropbox, just to name two obvious cases).
It's all about lobbying, the kind that you don't find in public records - i.e. bribing and corruption.
To be more specific, because the parallels may not be evident, the IP tactics of a burgeoning industrial nation are likely to be underhanded because the system favors the established power (see patents within the US). I find it extremely amusing to watch the US crow about IP when its very own industrial base was built upon foreign tech... just like China today.
> I find it extremely amusing to watch the US crow about IP
Irrelevant nationalism. What does the U.S have to do with China's blatant IP theft? Plenty of my non-American friends have lost quite a bit due to China's underhanded tactics, and they're not big players. China isn't stealing IPs from the U.S because it's "America", they're stealing any IP they can get their hands on, whether it's from America, Russia or Bulgaria. They've already "caught up" to the rest of the world as far as technological development goes, now they're trying to get ahead.
It's largely the reason why every country who participates in the ISS wants absolutely nothing to do with China and wouldn't let them participate in the program. There was a vote and it was unanimous. Participating in the ISS would have opened the doors to a lot of sensitive and classified IPs and nobody trusts China enough not to abuse their position of corroboration.
China is literally bursting with corruption and it boggles my mind why anyone would want to do business there. My experience with that country is that if you're not corrupt, you stand no chance. It's not something that's underhanded or kept "hush hush", but par for the course. Expected.
China really is shooting itself in the foot here. It's not just America they're pissing off and scaring, but the rest of the world. America isn't the only country with IPs to lose, and if you think everyone else isn't paying attention, then you're naive.
Artificial “intellectual property” monopolies are anathema to innovation, and they’re a major reason why the US tech industry is mostly reduced to making online chat room apps for cellphones developed by China’s tech industry. China’s choice to not enforce foreign companies’ “intellectual property” rights against its domestic industry exactly mirrors the US’s very successful choice to do exactly the same thing in the 1800s, except that the US did it overtly, rather than in violation of treaties it had signed. (However, the US’s territorial expansion during the same period, also crucial to its prodigious economic growth, was in violation of treaties it had signed.)
> US tech industry is mostly reduced to making online chat room apps for cellphones
That may be the face of the US tech industry that shows up on TechCrunch but the reality is that the rest of the industry is far more varied and much deeper than consumer apps like that.
Healthcare, energy, aerospace. Those—and a few dozen more—are all tech industries worried about IP protection. They just aren't sexy and don't make it to the top of HN.
The US has the least cost-effective healthcare system in the world except possibly for Switzerland — it manages to provide a reasonable level of care, similar to that of Cuba, but only by throwing enormous amounts of money at the problem. It's certainly true that it’s “worried about intellectual property protection”, but not in the way that you imply — intellectual property harms healthcare more than perhaps any other industry, accounting for a very substantial fraction of those massively overinflated costs. And it’s only through pushing through exceptions to the “intellectual property” regime pushed by the US, in WIPO, that India has been able to essentially end the AIDS epidemic in Africa.
Energy is the industry where US producers of photovoltaic panels — the primary source of marketed energy for the world starting in the 2020s — have had to seek domestic protection behind punitive tariffs against the Chinese manufacturers who are dominating the market by relentlessly copying each other’s innovations. Evergreen Solar, the only pure-play US photovoltaic company, went bankrupt in 2011.
The part of the US energy industry that’s actually an economic bright spot is oil and gas extraction. I don’t know much about their economic structure. Maybe you can elaborate?
Aerospace is indeed an exception to the overall pathetic performance of the US tech industry, and the 481,400 people working in 3364 aerospace in the US are rightly proud of that, although you’ve probably noticed that a lot of US companies that want to launch satellites end up having to buy launch services from Russia or Europe. But the US aerospace industry is largely supported by the US Department of Defense (74% of Lockheed’s income is from the military, and 45% of Boeing’s income is from BDS), and the DoD does not consider it an option to buy from lower-cost and higher-quality manufacturers in China or even Europe. That massive DoD R&D subsidy is what enables companies like Boeing and Lockheed Martin to compete overseas (admittedly, against other similarly-subsidized competitors).
I agree - it's not good, but to be horribly cynical about it China (and it's local chip manufacturer lobby) is just optimizing: as long as they can squeeze Qualcomm without pushing them out entirely, it's effectively the same as granting a subsidy to the local market, except that Qualcomm pays for it and ultimately is happy to since even after the shakedown Qualcomm is making a lot of $$ in China. In fact, to me the most perverse thing is that after a $975M fine share prices are UP, which I at least partially read as: now Qualcomm is in the fold and will (at least for the short term) benefit from the stability of being part of the machinery.
Well put. Re: stock price, there was so much uncertainty about this situation building up since the summer that most investors are happy to see a conclusion.
No, it doesn't. Just like every other neoliberal economy out there, since when has China's government started caring about the consumers?
The Chinese government is "punishing" Qualcomm for monopoly, yes, but it has nothing to do with the consumers.
"fueling concern that the country -- the world’s second-largest economy -- is using such inquiries to boost its native enterprises."
No shit. Look at all the local clones/"competitors" that have started doing very well after the original companies have been eliminated from the market (Google, Dropbox, just to name two obvious cases).
It's all about lobbying, the kind that you don't find in public records - i.e. bribing and corruption.