
How Chinese Officials Hijacked My Company - ilamont
https://www.wsj.com/articles/how-chinese-officials-hijacked-my-company-11596233617
======
Wolfenstein98k
The scale of their IP theft is incredible.

The CFO survey said it is happening to 1 in 5 US corporations, which is
incredible if you think about it - but the trouble is the scale is larger than
that, when you include what they steal via surveillance too.

I can't see an answer outside of decoupling, seeing as they're set on their
path and proud of it.

[https://www.cnbc.com/2019/02/28/1-in-5-companies-say-
china-s...](https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-stole-
their-ip-within-the-last-year-cnbc.html)

~~~
matz1
>I can't see an answer outside of decoupling

Maybe stop relying on IP as your business strategy ? Always be innovating so
that you always be one step ahead those who copying.

~~~
Wolfenstein98k
How do you out-innovate a country which has less regulation, more intrusive
surveillance, more factories ready to churn out whatever you invent, more
workers (and Uighur slaves) ready to do the labour for less, and no qualms
about stealing anything and everything you come up with and copying it at a
scale you can't possibly match?

~~~
Thorncorona
Perhaps we could stop dismantling the domestic economy by implementing
policies that reward domestic investment? Huge swaths [0] of the country are
losing their livelihoods due to offshoring and monopolistic practices.

[0] [https://policybynumbers.com/economic-stagnation-and-
electora...](https://policybynumbers.com/economic-stagnation-and-electoral-
discontent-in-the-rust-belt)

~~~
rStar
there are hard problems in the world. we need rational national strategy to
give ourselves a chance.

------
corty
The article gives several possible ways to improve the situation. However, one
critical way is missing imho: China forces foreign investment to always come
in the form of a joint venture with a Chinese company. This practice needs to
be forbidden or heavily penalized in all future trade agreements and similar
international contracts.

~~~
murgindrag
Or reciprocated.

Chinese citizens have invested a ton in US businesses, which is sort of okay.
They also bought a ton of land in the US, which led to skyrocketing housing
prices, and in the long term, if it continues unabated, will lead to the US
paying tribute to China in the form of rents on US land. There is no upside to
this. We got cheap Chinese plastic trinkets. They got our real estate. Didn't
we do this to the indigenous people here once ourselves?

To be clear: I'm not opposed to being able to buy foreign land per se, but I
am opposed to how one-sided this is. For the most part, US entities can't
really own real estate in China (and even with Chinese entities, it's complex,
but that's another story).

~~~
Wolfenstein98k
Here in Australia, it's a giant issue too. There are plenty of houses which
are Chinese-owned but unoccupied. They are effectively "banks" for storing
cash. The scale is shocking, our "foreign ownership" figures for real estate
are entirely skewed to this one country.

~~~
tgsovlerkhgsel
I believe Switzerland has a relatively elegant solution for this: You get
taxed on the expected rental income if the house is empty unless you can prove
that you _couldn 't_ rent it out.

~~~
mthoms
Same here in Vancouver.

------
balola
It seems he fell into a classic trap, the Chinese partner never intended to
make cars, as the only product they ever produced is a Smart-like "mini-four-
wheel-car", which was itself stolen from an HK student design.

So the plan is quite apparent, the Chinese partner just wanted his reputation
and brand recognition, in exchange for promised access to the China market, to
leverage huge land quota (state controlled lucrative resource, highly coveted)
and bank/government loans. It never planed to make any real cars, it's just a
capital play to game and profit off of the system, like pennies for grands.

~~~
zhikanbumai
Relevant news coverage in Chinese:
[https://translate.google.com/translate?sl=auto&tl=en&u=https...](https://translate.google.com/translate?sl=auto&tl=en&u=https://tech.sina.com.cn/it/2020-08-06/doc-
iivhuipn7067803.shtml)

~~~
runnerup
Thank you, this was an excellent read for myself, an English-speaking
American. It's interesting how much of a big story this is locally for that
city.

Are Chinese news stories often this long and detailed?

Is it extra newsworthy because Saleen / "Sailin" vehicle manufacturing was
part of that province's five year plan? Or would this have gotten the same
coverage regardless?

~~~
baybal2
The story enough fishy to look like a scam even by Chinese standards.

1\. Doing business in China? Do it without govt. involvement. The less you see
those guys the better.

2\. Never do any joint ventures. Never deal with stocks, and public companies.

3\. See a well wisher popping up on your doorstep with a business proposal?
Turn the guy around, he is a scam.

4\. Don't be public about your business, be as obscure as possible. Operate on
online platforms. Have disposable shell company structures.

5\. Don't ever get sued, and this is why you keep shell companies. Chinese
legal system is almost as "sticky" as American one, if not more. Once the
legal "casus belli" is established, and the court takes on the case, the
plaintiff can keep suing you for all eternity.

~~~
balola
I didn't read the article until now, it reads exactly like what I said, a
capital play.

Yet shocking still, it mentions Youth Motors/Qingnian Automobile/青年汽车 as
Saleen's neighbor and former plant owner, my god, this is beyond stupid.

Youth Motors made the news last years after its "tech breakthrough of cars
powered by water", which in reality is just ineffcient water-to-hygrogen
onboard, it became a national joke, it also received huge amounts of
government investment and apprently still doing fine right now.

This is the result of local governments not having to pay their debts, it's a
feast.

------
Ericson2314
Honestly I don't have much problem with protectionism. Flagrant theft is no
good, but when the companies enter in the domestic partnership the IP transfer
is rather more de jure. And if China didn't take any IP they would continue to
be massively under-developed and just a source of cheap labor, be cause
there's no way in hell US companies would have willingly fostered higher
skills, higher pay there.

Let's face it, major US companies that outsource to China are doing _fine_ ,
at least compared to workers, and we shouldn't start fucking WW III to raise
their profits further.

What's far more concerning to me is what is described in
[https://phenomenalworld.org/reviews/trade-
wars](https://phenomenalworld.org/reviews/trade-wars), the general race-to-
the-bottom export dynamics where every country surpresses wages to try to stay
competitive, and via the paradox of thrift not enough consumption has been
afforded. This will ruin us. And we see the race to the bottom politically
too, which follows.

That book says bilateral tarries are a farce because commerce can route around
them. As a programmer that makes....goddamn sense. They instead recommend
general capital controls, which cannot be routed around. That also makes
sense.

How about we fix our rotten economy, reinvigorate society, and win a cultural
war rather than loose a real one?

~~~
unishark
> And if China didn't take any IP they would continue to be massively under-
> developed and just a source of cheap labor, be cause there's no way in hell
> US companies would have willingly fostered higher skills, higher pay there.

We sell the training for those skills to anyone willing to pay as part of a
huge education industry. You can just buy the textbooks on amazon or get many
of them along with any other materials for free.

Smaller countries in the west who couldn't possibly stand up the the big
"bully" economies, and less developed regions like the US south, all have
developed right up the cutting-edge with everyone else. They became developed
by simply playing the game according to the rules. The real problem with
developing countries is the ability tofollow those rules. The culture isn't
fully-formed yet and some people are unclear on the line between
stealing/scamming versus legitimate business. That doesn't mean stealing and
scamming are a necessary part of development. It's the corruption that holds
it back. Economic growth is based on people taking risks and making deals,
which needs security and trust between them.

~~~
Ericson2314
> We sell the training for those skills to anyone willing to pay as part of a
> huge education industry. You can just buy the textbooks on amazon or get
> many of them along with any other materials for free.

Education is necessary but not sufficiency, because the manufacturing secrets
are sometimes intentionally secret, and sometimes simply the result of a
process that isn't reproducible.

If you want a programming analogy, imagine if China had all the source code
but no binaries. But worse, because there aren't codified programming
languages to describe arbitrary industrial processes.

> Smaller countries in the west who couldn't possibly stand up the the big
> "bully" economies, and less developed regions like the US south, all have
> developed right up the cutting-edge with everyone else.

Do you know of any country (excluding tiny ones like Singapore) that became
advanced without some sort of IP theft?

\------

To be clear I am not arguing that the US + China relationship has been good or
moral or whatever other positive quality. The US should have instead had
better foreign aid policies to help countries develop---none of that IMF
liberalization bullshit, but actual useful stuff like:

1\. You can tariff us and we won't retaliate

2\. We invest in your physical infrastructure

3\. We give you IP and shit so your industry can ween itself

However, this very sweet deal comes with commensurately strict conditions:

1\. Democracy

2\. Unionizaiton

3\. Gini coefficient maximum

4\. Wage floor

5\. Worker governance requirements.

It's really depressing that US foreign policy has been a objectiveless fucking
joke entirely captured by the nefarious interests of corporations and bored
rich people.

~~~
unishark
Secrets now? How did anyone ever develop in the first place if secrets were a
dead end? Anyway, even if you saddle them with a presumption of stupidity,
they can still do the stuff that isn't secret. You can make money on
commodities and low quality products in a developing country with low costs.
Whereas people in developed countries need to chase after the bleeding edge
because they can't survive without the higher margins there.

Why are you discounting very small countries exactly?

No one would take your deal because the government is the problem holding
countries back in the first place. China is an ancient civilization, not some
new child that was just born and needs to grow up yet. This analogy is overly
reductionist. Things that work in silicon valley right now also work
everywhere else in the world. It is not magic ground. And I'm no fan of IP,
but the system using it is clearly able to work here.

~~~
Ericson2314
> You can make money on commodities and low quality products in a developing
> country with low costs.

The factory owner can make a lot of money, but without advancing technology
there is no way to raise the standard of living. The PRC's hold on power is
absolutely predicated on raising the standard of living.

> Why are you discounting very small countries exactly?

At least in Singapore's case, being a strategically located trade intermediary
stopped a lot. But that only works when huge fraction of ones country is so
strategically located; this is impossible with a country of decent size.

> No one would take your deal because the government is the problem holding
> countries back in the first place.

Saying it's (always?) (usually?) the governments fault is capitalist
propaganda. Tell that to Prussia, Meiji Japan, or numerous other countries
with top down approach that worked. Raising the standard of living imposes
demands on all sectors of society. Indeed, it would seem the most useful thing
is a cultural memory of development. This possibly explains why Japan and West
Germany post war could use that US money so effectively, whereas say, Italy's
postwar miracle sputtered out sooner.

My deal is a good one because it's saying "get yourself going as an exporter,
but we will provide you with what you need to keep advance your economy and
standard of living to the point that poorer countries undercut your exports
but domestic demand makes up for it". Making that last step is _crucial_ , as
we need educated societies with leisure time to secure budding democracy.

(The US is failing because both we are uneducated and overworked. There is no
enough energy left over for the average person to help maintain their corner
of the commons.)

> China is an ancient civilization, not some new child that was just born and
> needs to grow up yet.

I didn't say otherwise? Yes, my plan is patronizing, but international
relations from the Hegemon usually are! (I don't know how to solve that
problem.)

I don't think it's relevant to my argument, but FWIW Chinese culture is much
more divorced from the past than say India's. Presumably this is due to
decades of propaganda, and major disruption both due to politics (Cultural
Revolution) and the huge economic changes (tons people living far away from
and in very different ways than their ancestors).

> Things that work in silicon valley right now also work everywhere else in
> the world. It is not magic ground.

Well, I'm suspicious how much SV is "working", and not just something that is
a) first mover benefit b) flushed with quantitative easing money when EU
didn't do that c) The actual big companies survive off rent seaking.

But let's just ignore all that and say SV is a smashing success.

SV succeeds because _it is in America_ , and hierarchy of needs / standard of
development -wise benefits and relies on an already technologically advanced
society. Asking why SV occurred in America is like asking why factories came
to prominence in Britain during the empire: it was historically inevitable.

If you are nation of subsistence farmers, developing some apps is not going to
solve your problems.

A parting example: When people gush about Africa skipping land lines and going
straight to cellphones, they should realize this isn't all good. Being able to
bury wires and pipes is key signal of internal stability, cooperation, and a
technology development that will raise the standard of living, and ability to
consume, for all.

> And I'm no fan of IP, but the system using it is clearly able to work here.

IP only work alright when all parties have some. That's fine amongst already-
developed countries. You can be sure if some Bangladeshi company steal's
Huawei stuff China will throw a fit too.

~~~
unishark
> Saying it's (always?) (usually?) the governments fault is capitalist
> propaganda.

I gather from your post that you may not have much experience with startups or
small business on your own, despite where we are. Because all the things you
say are hard or impossible or just not done, are things you see daily. People
with no IP working around that of others, which is the same problem for you as
a foreign company. People in developing countries starting businesses to trade
with the west (i.e. you). People in developing countries looking to what the
west needs, gaining the skills via western training (often free), then making
lots of money providing it to the west. And yes the killer is governments. The
"wealth of nations" is a simple model: skilled laborers use technology to
produce more than they need, which they can trade to people with complementary
skills. That's the whole system. Borders and cultures and IP are just details
to work around. Ultimately there is one big market. The only countries that
needs to relive the 19th and 20th centuries in this silly development-process
narrative everyone pushes, is places who's govt restricts them to a little
local economy foolishly.

~~~
Ericson2314
Actually, I work for a small tech company, and have to work around other
people's undocumented interfaces all the time just like everyone else in this
industry.

Your vision sorta works for software-based startups which are not capital
intensive and dominated by labor costs. And I've seen first hand how
telecommuting overcomes bad immigration law, allowing people in the west to
cut the deals that cannot be done remotely on effectively behalf of foreign
workers. Bad immigration law is indeed a government-induced problem, and this
is one of the best workarounds we have.

Even then, the idea that no good local education is needed and that some body
can just get a laptop, read some docs, and start making money is too
optimistic.

But the larger problem is I don't think there is enough demand for YC-type
stuff to significantly change the standard of living of a state. Consider how
much money is dumped into SV startup before it makes money on average, and how
few people SV employs due to the productivity of tech. This is not a good
recipe for an entire nation.

The classic export goods are material goods; the far simpler unit economics
ensure a steady stream of money back home, and the produced goods can (at
least in principle) also be consumed domestically to make increasing in the
standard of living not import-dependent. No country has gotten rich in the
modern era without some of this, and I don't see this trend changing.

~~~
unishark
> Even then, the idea that no good local education is needed and that some
> body can just get a laptop, read some docs, and start making money is too
> optimistic.

This is viewing what I said in an impossibly narrow light. We don't need every
man woman and child (of sufficient age to work) to be brimming with such
initiative and self-agency. Just a subset of entrepreneurial ones who start
businesses which bring these factors together and hire others. This happens on
both sides of the ocean. If you can't hire the skills you need you train
people. It's far cheaper to do in a country where your competition is the pay
they get at home on the farm. This is exactly the situation in India. By the
way did you see the thread about what a hassle it is to start a business in
India?

Only a fraction of Americans work for large businesses. Generally more work
for small businesses, so focusing only on giant scaled-up business models
isn't even an accurate picture here.

------
jkhdigital
For some reason, after reading this article and a bunch of the comments here,
I'm reminded of two quotes from two of my favorite authors:

"Standards of living far below what we would consider to be poverty have been
the norm for untold thousands of years. It is not the origins of poverty which
need to be explained, since the human species began in poverty. What requires
explaining are the things that created and sustained higher standards of
living."

from _Wealth, Poverty and Politics_ by Thomas Sowell

"Modernity needs to understand that being rich and becoming rich are not
mathematically, personally, socially, and ethically the same thing."

from _The Bed of Procrustes: Philosophical and Practical Aphorisms_ by Nassim
Nicholas Taleb

------
neonate
[https://archive.is/oLIJl](https://archive.is/oLIJl)

------
FpUser
Personally I no longer support the concept of IP. Reason being that if it was
enforced to the letter nobody except largest corps can't make a single thing
now without breaking some patent and sued to the oblivion. As for software
patents, this is just cherry on a cake of insult.

I bet there is not a single software product out there that does not break
some patent.

------
alloai
There are two sides of the story, there is a Chinese version saying that there
are a lots of frauds here.

Car making is a capital burning business, you just can not do it without the
wealth like elon musk.

It's kind of a venture investment here, there were so many car investment in
the past few years, when there were investment bubbles, but now, the bubble is
gone.

~~~
magicsmoke
I've read in a paper somewhere that a big part of why Chinese auto
manufacturers aren't as successful as Japanese or Korean ones is because
they're too tied to the local government to fail. Each province in China has
their own local auto company connected to the provincial government, resulting
in a lot of duplicated effort and inefficiency. Japan and Korea had a lot of
indigenous auto makers when they first started as well, but they allowed the
weaker ones to get bought out and cannibalized to build up the stronger ones.

~~~
xenospn
Japan has a very long tradition of quality and striving for perfection. China,
not so much. And cars these days really need to be more than “good enough” to
compete worldwide.

~~~
freddie_mercury
Japan's worldwide reputation was "garbage, low-quality stuff" until the 1960s.
That's not a "very long tradition".

"At first, Japan had a widely held reputation for shoddy exports, and their
goods were shunned by international markets"

For a pop-culture example look at the Back To The Future movie where the 1955
version of Dr. Brown says "No wonder this circuit failed. It says 'Made in
Japan'." The 1985 version of Marty says "What do you mean, Doc? All the best
stuff is made in Japan."

~~~
xenospn
That's not the kind of "stuff" I'm referring to. Any visit to Japan will
reveal rich history full of incredible craftsmanship and attention to detail -
engineering, arts, and design.

A similar visit to China - not so much. They have so much ancient history -
but their modern story is not as pleasant (for various reasons).

I love China and have traveled across it multiple times. I think it's a
beautiful country full of wonderful people - but they just don't have any kind
of desire to achieve perfection like the Japanese do. And Japan was able to
exit their "goods shunned by international markets" phase very quickly (Tokyo
hosted the Olympics and started running the Shinkansen in 1964, less than 20
years after the war).

When will china stop making "cheap stuff"? When will they create their own
proprietary tech and license it out to us?

------
de6u99er
Reminds me of the TransRapid story.

[https://www.dw.com/en/china-masters-german-train-
technology-...](https://www.dw.com/en/china-masters-german-train-technology-
will-cut-costs/a-1982476)

~~~
AlbertoGP
Well, they did promise to cut costs to 1/3 of the German version, but they
didn’t actually build it:

“Originally planned to be ready for Expo 2010, the controversial project was
repeatedly delayed, with final approval being granted on August 18, 2008.”

“[...] In March 2009, the project was reported to be "suspended", although it
had not been officially cancelled. The October 26, 2010 opening of the
Shanghai–Hangzhou high-speed railway makes construction of this line
unlikely.”

[https://en.wikipedia.org/wiki/Shanghai%E2%80%93Hangzhou_magl...](https://en.wikipedia.org/wiki/Shanghai%E2%80%93Hangzhou_maglev_line)

But they keep promising it:

Title: “China's 600 km/h high-speed maglev prototype completes successful
trial run”

Reading further: “The prototype didn't run at 600 km/h, but at a much lower
speed as an operational debugging test.”

And then: “According to CRRC, by the end of 2020, five high-speed maglev test
vehicles will be rolled off the production line. Besides, a whole engineering
system of the 600 km/h high-speed maglev prototype will be completed, which
signifies China will master a whole set of the technology and engineering
capability by that time.”

“[...] China aims to put a 500-km-long high-speed maglev line into commercial
use by 2025.”

“[...] Using German technology, the Shanghai maglev line is a demonstration
line. Since then, China has been striving to develop its independent
technology in the field, where Japan and Germany have been taking leading
positions.”

“Step by step, the country is making solid progress. Analysts say that the
successful test on Sunday signifies that China has achieved the same level as
Japan.”

[https://news.cgtn.com/news/2020-06-21/China-s-600-km-h-
high-...](https://news.cgtn.com/news/2020-06-21/China-s-600-km-h-high-speed-
maglev-completes-trial-run-RvueeEECTm/index.html)

------
naringas
intellectual property is conceptually corrupt.

at the very least we should be honest and admit that it's all about being
continuously paid for things we already finished doing (sometimes even
generations ago).

but I am pretty sure that it will have to get worse, far worse, so bad that a
Kafka seems tame before people get convinced that ownership over language is
stupid.

~~~
jonahbenton
The other way to look at it is to recognize that it is hard to invent and
prove the value of something, but easy to copy and pollute once that is done.
We are all familiar with unfortunate examples of this.

And yes, copyright extension, yadda yadda, but no one is being forced to
enjoy, for instance, Mickey Mouse. That they do, and it endures and retains
value- why is the creator not entitled to protect it as an asset for as long
as people value it?

And regarding the Kafka reference, the story of his stories is itself
enlightening on this subject. We only have them, and the utility of the
reference, through the protective actions of his friend. Were there no
Intellectual Property, they would have been burned after his death.

Cheers.

~~~
chillacy
> why is the creator not entitled to protect it as an asset for as long as
> people value it?

That masks the fact that IP laws are a form of regulatory capture. The
original deal was to gain exclusive ownership _for a limited time_ at the cost
of disclosure and understanding that it would eventually enter the public
domain.

Fun fact, before trademark laws were enforced, baggage makers like Louis
Vuitton just increased the quality of their stitching / logograms in order to
differentiate themselves. In fact the modern LV prints are a result of this
process of trying to make his goods too expensive to counterfeit. Now luxury
brands can stamp on inferior quality materials and sell just as well. There's
no competitive force to increase quality anymore, these brands can just put
their logos on decent-but-not-top-end materials.

------
worlddan
Managed to find below article on a bit of searching. Seems like 2019 was still
good year for Saleen? [https://jalopnik.com/you-re-not-gonna-believe-the-
crazy-shit...](https://jalopnik.com/you-re-not-gonna-believe-the-crazy-shit-
at-saleen-s-chi-1836675160)

------
bergstromm466
_" How can politicians look into TV cameras and say we have a free market
system when patents guarantee monopoly incomes for twenty years, preventing
anyone from competing? How can they claim there are free markets when
copyright rules give a guaranteed income for seventy years after a person’s
death? How can they claim free markets exist when one person or company is
given a subsidy and not others, or when they sell off the commons that belong
to all of us, at a discount, to a favoured individual or company, or when
Uber, TaskRabbit and their ilk act as unregulated labour brokers, profiting
from the labour of others?"_

\- Professor Guy Standing

also:

 _1\. The current political economy is based on a false idea of material
abundance.

We call it pseudo-abundance. It is based on a commitment to permanent growth,
the infinite accumulation of capital and debt-driven dynamics through compound
interest. This is unsustainable, of course, because infinite growth is
logically and physically impossible in any physically constrained, finite
system.

2\. The current political economy is based on a false idea of “immaterial
scarcity.”

It believes that an exaggerated set of intellectual property monopolies—for
copyrights, trademarks and patents—should restrain the sharing of scientific,
social and economic innovations. Hence the system discourages human
cooperation, excludes many people from benefiting from innovation and slows
the collective learning of humanity. In an age of grave global challenges, the
political economy keeps many practical alternatives sequestered behind private
firewalls or unfunded if they cannot generate adequate profits."_

\- By Michel Bauwens, Franco Iacomella

------
warmcat
Should we really be surprised at this?

------
beaunative
This happen to be a well-reported news on the Chinese internet where I was
able to find more details. And the author's own claims are dubious and
sketchy. It was never a three way deal, he may have deals with a Chinese
company that owns share. That maybe why he said it's a threeway deal, but it's
two two-way deals. He never made any deal with Chinese officials, but another
Chinese business owner who made the deal with the government. The fact he
didn't say is that the company was in debt and bankrupted, whose employees are
still trying to get paid for their work. Another claim he make is that the
local government did fulfill their monetary investment. The author said the
money that the local government gave was not 'nearly enough', which is
impossibly large tax-payer money, to build streamlined car production, but
both parties agree to the deal in the beginning, it was the expectation. And
the investor would of course, expect the invested to deliver the said product
with said investment, which, as the author said, didn't happen.

What's more. There is an whisleblower within the company who work in the
accounting department shared with the public on open internet months ago that
the non-investing shareholders of the company who didn't put in any money,
instead intellectual properties, take mortgage out of their shares, which
would be unacceptable in most investment scenario because unless the patents
are sold, it's outright stealing from the investing shareholder who put in
actual money especially so when the final product weren't made and sold. The
accountant told the public that those patents are bought with 2.2 million US
dollar but were valued as 100 million, and 'technologies' that were included
in the valuation are yet to be perfected, that can't be used in production.

This rant piece is nothing more than a shameful attempt to exploit American
sentiment on Chinese 'property theft' trying to sway an on-going court
judgement to the author's private financial interest.

If there are any wrong-doings should be left with the court to decide, but
there are enough ground for an investigation to be launched, or at least, for
the investor to be angry. If the author actually ran an successful operation,
I would feel sorry for him, the evaluation issues won't be a problem, but that
simply wasn't the case. It is a catastrophic waste of public money for a
failed venture of the author and his partners.

I can not attest to if the author is making those claims unaware of those
problems that he himself is also cheated by the other party, which is the
Chinese company who mortgaged their shares and actually owns the patents. That
company bought the company the author originally founded in the US, leading
the private Chinese companies to own the author's patents.

I'd say the Chinese government is the fool in this scenario.

~~~
tlear
Author is an extremely successful businessman and inventor with something like
30+ years of track record running business in US without defrauding anyone.

I will believe him over PRC propaganda any time.

~~~
beaunative
Those business transactions could be easily verified. Had he been such a
successful businessmen, why was their initiative failed so miserable as he
himself acknowledged when the said fund is provided in full? He quite
literally burned 100 million dollars over the course three years without the
company being operational sustainable let alone profit, in what scenario would
an investor be ok that their actual 100 million us dollar all turning into
dust? His own operation here in the US are bankrupted as well, in what sense
is that a successful business? or that he is a successful businessmen? All of
those are year old material existed on the internet before his wsj piece. You
should be easily able to find more. Following the bankruptcy, a company's
asset will be liquidated. He also claimed the government filed patents without
his consent, while it's the company he worked at filed and owned those
patents, it's the company's property from the beginning, that's how it works,
surprised? get a job. any financial investor would require how it should be
done. Be reminded he have 100 million cash in hand to spend, while
'technology' was valued at 100 million too, with two parties each owning half
of the company, which can't be said to be a bad deal.

[https://www.autoevolution.com/news/saleen-might-file-for-
ban...](https://www.autoevolution.com/news/saleen-might-file-for-bankruptcy-
owes-millions-according-to-us-sec-filing-89360.html)

------
oger
The real question here is: Is it getting better? For example Alibaba is
putting a lot of effort into combating fraud (I.e. fake products) on its
platform. The Chinese government also made serious moves. Does IP theft exist
and is it serious? For sure. Is it getting better? Probably yes. Does being in
an election year help to have realistic reporting on this issue? Probably not.
And BTW have a look at how Japan grew in the 60s and 70s.

------
a0-prw
20% ? I'm disappointed. I would have hoped that a nation as smart as China
could be more effective than that.

------
nsoonhui
Not really off tangent: I won't be surprised if this attracts lots of comments
along the lines "US/ WESTERN COUNTRIES did this before too and therefore no
better than China".

I just can't understand why when it comes to geopolitics, HN just can't keep
the discussion related to the submission? Somehow US/ western countries have
to enter the discussion as a bad benchmark...

~~~
mattmanser
No-one has yet, but what's the problem with it?

America stole Britain's intellectual property for a leg up a century or two
ago, now a different country is doing it to them.

It's just the normal cycle, and America have long had a lot of artificial
legal protections in place to try and stop it and limit the rest of the
world's prosperity.

The harsh copyright laws and IP agreements they've bullied the rest of the
world into accepting are beginning to fail, and these sort of articles are a
direct consequence of that, why wouldn't we discuss it? It's an intellectually
interesting effect.

There's also the other question of is it really stealing? America still has
the knowledge, after all. Copyright laws were supposed to encourage
innovation, but as many here have argued, have gone too far, what's the
surprise now a country has enough power to say No to America, they're saying
No.

~~~
kiba
_America stole Britain 's intellectual property for a leg up a century or two
ago, now a different country is doing it to them._

There's a difference between copying from open source patent database and
reverse engineering versus blatantly engaging in industrial espionage, which
is a whole another kettle of fish.

Or claiming to be playing by the same set of rules but blatantly violating
them.

 _The harsh copyright laws and IP agreements they 've bullied the rest of the
world into accepting are beginning to fail, and these sort of articles are a
direct consequence of that, why wouldn't we discuss it? It's an intellectually
interesting effect. _

Patent systems should be considered harmful to nations that enforce or
implement them, but that's another story for another day.

~~~
mattmanser
I think you need to read up on your history. Here's an easy place to start.

[https://www.google.com/search?q=america+stole+britain+intell...](https://www.google.com/search?q=america+stole+britain+intellectual+property)

There's plenty of documented evidence that America illegally stole tons of IP,
often paid for by the state no less, otherwise known as industrial espionage.

I'm sure they did it to all the European powers of the time too, probably
plenty of examples of stolen tech from Spain, the Dutch, etc.

As I'm sure Britain, etc. did to the civilizations more advanced to them in
the centuries before too, you can bet there were proclamations about not
taking technology out of the cities that had monopolies on them, and were
smuggled out illegally or simply attacked for them.

~~~
kiba
_Too much effort? America llegally stole tons of IP, otherwise known as
industrial espionage._

What about it? That was over a century ago. It still doesn't make China's
industrial espionage ethical or right.

~~~
Ericson2314
Let's put it this way, if American companies had their way, china would still
be low-education hoard of manual labors with no advanced industry. Obvious no
country wants to end up in this situation.

Let's promote actually good things like free speech, privacy, etc., and not
draconian IP policies that just allow the same rent seeking giant corporations
everywhere to fuck us all over everywhere. If we tie everything together,
we'll loose all of it.

~~~
refurb
Why would companies want "low-education hoard of manual labors with no
advanced industry"? There would be no way they could buy American products.

~~~
Ericson2314
Because they can sell them to American consumers at high margin.

Companies have been neglecting the demand side for ages now. Increasing
American household debt bought them some time, but isn't a very sustainable
resource.

------
spectre8
China only recognizes patents applied for and granted by the China patent
system. I believe you engaged a Chinese company to handle the JV. I worked in
China 8 years. The amount of obfuscation and outright theft is beyond
comprehension.

------
sercankd
Article is behind paywall, is there alternative link?

~~~
throwayws
It seems they activate the paywall after a post gets traction. Because there
was none before.

~~~
croutonwagon
Easy bypass is to run it through a url shortener, and then outline.com.

Works for NYT as well, and most others.

~~~
dwd
NYT can be bypassed using Reader View, but the WSJ seems to be able to disable
it.

~~~
croutonwagon
Sometimes. I find it can be hit and miss. Depending on how many articles ive
read....er loaded.

Outline trick works for a lot. Even sites like financial times etc

------
11thEarlOfMar
The US is in withdrawal from 4 decades of policy that intended to bring China
out of the 3rd world and into the first. The motivation was to reduce the
threat of nuclear war and at the same time, create a major new market for
trade.

Those positive intentions did not foresee what China would actually become,
and even if US administrations all along could have foreseen it, they may have
persisted, believing that reducing nuclear threat was worthwhile, even with
the current adversarial outcome.

The line that got crossed that I don't believe anyone anticipated was the
genocide of entire ethnic and religious populations. Those horrors have a
moral weight that counterbalances the threat of nuclear war. We have no choice
but to completely decouple, and what's more, may still find ourselves in the
shooting war we were trying to evade.

------
NicoJuicy
There's only one way out and ( to my opinion) it's redirecting resources to
support "Made in India 2025"

~~~
fermienrico
Indian manufacturing is notoriously bad for the same reasons. So many Indian
companies will backstab foreigners. They make fun of their gullibility,
“firangis” and there is so much local callousness in India against foreigners.

~~~
NicoJuicy
The problem is coming up with a solution.

India > China and also has a billion civilians.

They are nowhere near that abusive as China. And are more western minded.

What's your best workable solution then?

------
Angeo34
If China does it to the US it's bad and newsworthy but the fact that Germany
is the most spied country worldwide by the US for industrial espionage this
seems like hypocrisy at best which is what the US is known for anyway. At
least China is consistent.

------
quoyn
Reading the title and the url my first thought literally: "What? someone from
Wall Street Journal admitted they are bought and paid by the Chinese?"

Not joking here WSJ has admitted, after a lot of pressure, to receive money
from China Daily it's just not very well known.

------
cnl2020
Is IP theft in China a problem?

Yes

"I would bring experience, design, engineering and related technologies
developed over my 40-year career in the automotive industry building race cars
and high-performance street cars. My contributions to the deal were valued at
$800 million"

Yeah. Sure. And then the ferry tale starts...

(I live in China and work with some VC guys)

" the joint venture applied for 510 Chinese patents for my designs,
technologies, trade secrets and engineering developments. Most of the patent
filings didn’t even list me as the inventor. "

Yeh. Sure. I may believe this number since patents applied for/issued it is a
metric for Chinese companies based on government requirements. 1 Person? 500
Patents? be assured that most of it are bullshit patents.

