
Forced Tech Transfers Are on the Rise in China, European Firms Say - JumpCrisscross
https://www.wsj.com/articles/forced-tech-transfers-are-on-the-rise-in-china-european-firms-say-11558344240
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perfunctory
Framing detector is on. I have an issue with the word "forced". Nobody is
forcing you with a gun to your head. Don't want to be "forced" \- don't go do
business in China.

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zhongjiewu
Ironically, there are aircraft carriers moving around the oceans forcing some
countries regarding some agenda.

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CogitoCogito
> Ironically, there are aircraft carriers moving around the oceans forcing
> some countries regarding some agenda.

What irony are you referencing specifically? The United States' usage of
carriers to threaten the PRC? The PRC's usage of carriers to threaten the ROC?
Some other countries?

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dv_dt
Epitome of lemming syndrome: OMG we have to setup shop in China so we can
produce goods more cheaply. But if we do we're forced to give up the tech. Can
we just not do that? But all our competitors are going to do it.

Maybe invest in another nation or continent.

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CogitoCogito
If by "lemming syndrome" you mean "tragedy of the commons", you're entirely
right. This is exactly why either a concerted US government push-back is
needed (as is occurring now) or an acceptance of the tech transference (as
occurred before).

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dv_dt
No not tragedy of the commons, it's that businesses are so focused on growing
short term profits they'll enter into efforts that yield profits in the three
year timeframe that are long term losers (giving up IP) in the medium to long
term. It's madness.

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CogitoCogito
> No not tragedy of the commons, it's that businesses are so focused on
> growing short term profits they'll enter into efforts that yield profits in
> the three year timeframe that are long term losers (giving up IP) in the
> medium to long term. It's madness.

Okay sure it's a combination of searching for short-term profits and tragedy
of the commons. Individuals acting in their own self-interest against an
overall greater good.

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dv_dt
IMHO, government has little real power to pragmatically curtail this as a
formal trade issue. If it's legally not allowed, it's not like employees in
China can't walk away with the tech anyway. The question is where you want to
build your technology base and where short term greed drives you to build.

Private IP of companies isn't any sort of public commons. By deciding to build
stuff in China, they've already left the only arguable commons part of that -
the common labor knowledge base that forms naturally where you put your actual
build operations.

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CogitoCogito
Well the US could for example put up trade barriers that are costly enough for
China to change. Of course it might not work due to lack of US political will,
or strong Chinese political will, or any number of reasons, but it's not like
nothing is possible. I'm not necessarily saying this is a good idea, but it's
not like this is some magically impossible problem to solve.

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baybal2
I remind you, developed WTO member countries are obliged to facilitate
technology transfers to lesser developed countries by WTO charter.

It might be a surprise to most HN readers, but that clause was put in WTO
charter by... USA

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z2
I think a unique problem with China (and India too in the future) is that it
is so big that the consequences of transfer materialize faster and and in
bigger ways. Unlike smaller developing nations, China seems to be pretty good
at learning and implementing, either as a matter of policy or through the
sheer size of its markets and burgeoning professional class. Siemens and
Kawasaki probably didn't expect China to internalize their high speed rail
tech in a few short years, and proceed to compete internationally against
them. Where do you draw the line from acceptable transfer? Is stealing a
retroactively-applied term when someone exceeds the teacher or can the terms
of transfer be done better upfront?

In other words, I wonder if there's a way to adjust tech transfers to
developing countries based on not just the level of development, but also how
'dynamic' the developing country is? Is it fair to punish a country having a
population and policies in place that focus on learning and development?

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tracer4201
What is it about China that allowed them to so quickly internalize that high
speed rail tech so they could compete with Siemens or Kawasaki?

Meanwhile, in the US, our government is on the verge of shutdown every year
because we have to raise some artificial debt ceiling to keep the federal
government operating.

Why are the Chinese so much more efficient? Americans, even progressive
Americans, often think of government being large, inefficient, and bloated.
What’s the disconnect?

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dv_dt
I think that greed is easier to manage when expanding into underserved &
undercapitalized markets - in that environment most capital increase becomes
an easily spread general improvement in life quality.

When trying to balance inequality in well-capitalized, mature markets, you
fundamentally have to trade one set of ownership against another on a much
more frequent basis. To replace one set of capital investments with another
(even when the new investments are an improvement), requires displacement of
the old owners and old industry; see fossil fuels and climate crisis as a
major example. Government becomes a battleground between the capital interests
and is often where progress is neutralized.

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tracer4201
So it’s like a new greenfield project vs dealing with legacy systems?

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dv_dt
Yes, but instead of code and past technical decisions fighting against
advancement, it's people with capital and interests in the status quo.

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baybal2
Had a conversation recently about all that.

People ask if the industry will wrap up and move from China.

I ask them in response: where would they run away to? Vietnam?

Vietnam's entire light industry output is like of one Dongguan's district.

India has a lot of workforce, tons of it, but the entire light industry
ecosystem has to be built from scratch, or brought along with you.

They can't run away.

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seanmcdirmid
If negative pressure is sustained long enough, alternatives will be developed.
How long has China held a dominant position in electronics assembly? Less than
20 years...and that would be generous.

So things can change, definitely not overnight, but in a few years.

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the-rc
Well, before China, it was Japan. They dominated the 80s and a good chunk of
the 90s. They still have a lead in markets such as cameras and are fairly
competitive for technologies like Flash, which they actually invented. Samsung
passed Toshiba a decade ago or so.

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seanmcdirmid
Don’t forget Taiwan and Korea.

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the-rc
Yeah, those have been displacing Japan along with China. I mentioned Samsung,
but was mostly focusing on Japan as an example of a country whose star can and
did dim, as a potential parallel for future China. It has taken longer than
the few years the parent poster cited.

It's also worth noting that China still has a long way to go when you look at
particular markets such as semiconductors, where export controls have slowed
them down.

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seanmcdirmid
Japan was displaced by them significantly in the 90s, then China displaced
everyone mid 2000-2010.

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lambdasquirrel
What’s kind of fascinating to me is that it’s the WSJ and FT reporting on
this. Whereas if I go and browse a German paper, I get this:

[https://www.spiegel.de/wirtschaft/unternehmen/handelsstreit-...](https://www.spiegel.de/wirtschaft/unternehmen/handelsstreit-
zwischen-usa-und-china-auch-eu-firmen-leiden-a-1268302.html)

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danmaz74
Isn't IP transfer abundantly mentioned at the end of the article?

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lambdasquirrel
As a counterpoint, and instead of a point of fear.

I would almost offer a way to easily counter these "forced tech transfers,"
but with the tone taken here and elsewhere, I just sit back in disgust.

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amluto
I frequently think that the China is not actually the bad guy here. To me,
tech transfer sounds like a good business practice. If I were going to spend
billions of dollars buying something, I would seriously consider demanding the
IP and know-how to make more of it myself in the future. That way I would have
some assurance that my purchase wouldn’t become unsupported and this worthless
and that I won’t get price-gauged once I’m locked in. Cough, Oracle, cough.
And having one’s major purchases translate to economic growth seems entirely
reasonable.

It seems to me that people mostly have problems with tech transfer because it
appears to be the government mandating it. Maybe the right solution is for
everyone else to start doing tech transfer, too.

Tech transfer to a limited extent for drugs in particular sound like a pretty
good idea.

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godzillabrennus
It removes much of the incentive to build new tech if you have to turn it over
and let someone steal it.

I wouldn’t go into China with any proprietary tech as a foreigner.

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jimbob45
There's a happy middle ground here. Patents expire after 20 years and that's a
form of tech transfer. Maybe China's 1 year is too short and the US' 20 years
is too long?

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SpicyLemonZest
I don't understand the parallel being drawn. The US doesn't require you to
file for a patent if you'd rather keep your technology secret.

