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China Steps Up Trade Secret Theft from US Companies (latimes.com)
265 points by spoiledtechie 65 days ago | hide | past | web | favorite | 194 comments



What's worse is that International companies have been just giving their technology to the Chinese for years and years.

In order to do business in China, non-Chinese companies must partner with a Chinese company. The International company shares their IP with their Chinese counterpart, and the Chinese counterpart in turn shares the IP with the their partner, the Chinese government. The Chinese government takes the IP and shuffles the IP to the company or companies best suited to exploit the IP. This has been taking place as long as China has been open to International business.

International companies in a rush to get access to the largest single market in the world have freely given away their IP, because they didn't think the Chinese could ever catch up. Companies are now moving partnerships away from China, and it's forcing the Chinese to steal the IP in order to keep their edge.

I try very, very, hard to avoid buying products made in China. I"m OK with every other country in the world, except China.


American here. I own two different companies in China.

“In order to do business in China, non-Chinese companies must Partner with a Chinese company.”

These days, what you’ve asserted here, is only true in a very limited set of circumstances.

For example, one of my companies is an engineering/supply chain consulting firm and the other is a fully licensed CM factory. With our factory, I have the China government paying me VAT tax rebates on export. I don’t have a Chinese partner, for either of these companies.

That said, it is very difficult to get setup here, without a Chinese partner. It is a difficult convoluted process. And, the locals have no incentive to see a foreigner succeed.

But if Americans want to own a private factory here, and more fully control their own IP and what they allow Chinese nationals to see. From my view as an American that owns a factory in China. They can do it!

Get on a plane, come over here, stay a couple years getting it done, and voila, you own your own factory in China, without a Chinese partner.


That’s because China now homegrows its IP. The right time to control this would have been 1978, not 2018.


Do you speak Chinese fluently? I'm guessing this would be difficult to do if not...


My Chinese is still pretty basic. Yes, learning some conversational Chinese and a few hundred Chinese characters pretty quickly, is required, if only to keep sane. But, my Chinese communication skill wasn’t/isn’t/hasn’t been a critical key success factor for business success. More important has been, utilizing employees well and having the sense to recognize and call “bullshit” when needed. Like, if a process seems illogical from a good business practices or efficiency point of view. And someone is telling you something that seems wrong. It’s probably wrong, and they don’t know what they are talking about. And, learning quick, most of what you see here in China, is not as it appears on the surface. Underneath, it’s probably a rats nest. Being a good detective is required to survive.


How easy is it to get your money out of China?


Not very easy. The best structure seems to be, to setup a parent company in Hong Kong. Then, setup a wholly owned subsidiary in China. Then, just send enough money every month to keep the China operations going. It is easy to get your money in and out of Hong Kong.


I went to Hong Kong earlier this year, and I was amused by how there were luxury watch shops seemingly everywhere. My first assumption was that they were for laundering money out of the mainland.


There are likely more than enough rich people living in and traveling to Hong Kong to organically keep these watch shops solvent.


Yup. Flying with hard currency or equivalents is difficult. Just don't bring the receipts or boxes for your new watch, bracelet, ear rings, and neck chain.


I've seen that chocolate and baby powder smuggling is big in Hong Kong.

https://www.youtube.com/watch?v=YQm5FZMforg


To think about going to China, you're going to have to think about how to LEAVE china first

"once the news goes out that you will be leaving China, alleged creditors will come out of the woodwork. The tax authorities will come up with taxes that you owe. Your landlord will explain why you owe it way more than you thought you did. Your suppliers will send you bills for items they never actually gave you. Your employees will demand all sorts of severance."

https://www.chinalawblog.com/2018/09/how-to-terminate-your-c...


[flagged]


When it comes to nation state affairs. Generally, entrepreneurs can only observe, predict, and act.

In 2009, the USA economy was tanking. As a new MBA who had studied options and derivatives, for example, I had a job offer on Wall Street with Bear Stearns, it made me angry. When I got the chance to come to China on a management consulting project, I noticed, China was booming. It was a great time to start a company here, and that’s what I did.

I don’t agree with all the social issues here in China. I also don’t agree with the USA financial system still being privatized after the greatest global robbery scheme ever invented.

Every nation has their problems, buddy. At this point, as an entrepreneur, I’m just in position to think about how to make money, given the political environment. I don’t think that makes me a bad American. That’s the American way.


[flagged]


It’s definitely the American way, for those of us Americans who don’t want to take a paycheck from somebody else. And that somebody else, whomever is behind paying your wages, is definitely navigating the global environment the best they can, to make money.


You can run your own business while taking into account other factors beyond what would purely be most profitable. Those aren’t at all mutually exclusive. I would actually say that one of the greatest joys of running your own company is that you’re free to try to do something good beyond making money.


As an entrepreneur, you are certainly free to try to do something good beyond making money. But, if you don’t make money, you won’t be free to do it very long.

Sometimes, you just got to make selfie-sticks, because that’s the opportunity you’ve identified, and in China, because consumers are not going to pay a premium for that product to be made in USA.


Sure, you need to make money, but it's a false dichotomy to say you can either make money or try to do something good. No one "just has to make selfie sticks".


> Every nation has their problems, buddy. ... I’m just in position to think about how to make money

Both sides!

> That’s the American way.

That's the amoral way. The sociopath way. Nothing particularly American about it.


There is nothing sociopathic about rationally navigating the global environment. Further, placing bets with your time and money, based on your observations, is what an entrepreneur does.


> There is nothing sociopathic about rationally navigating the global environment.

There is something sociopathic about a definition of "rational" that only encompasses financial profit. Maybe you're a good person, maybe you're making products that make people's lives better, but none of that's apparent when you brush off a comment about genocide with "yeah, but there's lots of money to be made". If there's such a thing as "the American way" there's more to it than Gordon Gekko. Don't try to rationalize pure materialism as patriotism.


No, unfortunately, the products I’ve made have probably not made the world a much better place. For example, I made, about 1 million selfie-sticks, for the GoPro camera. Sold in Best Buy, Target, Walmart, and frys electronics. Anytime you see one of irritating sticks with a camera on it. You can think of me.

Now, it would be great, if I could help stop genocide. It would be great, if I could change China. But, that’s out of my span of control. And no matter how much you preach at me, it is also, outside your own span of control.


Yeah, he should set up in the good ol' US of A, where kids are never separated from their parents when their parents are seized for dubious reasons and ethnic groups are never targeted for placement in `extraordinary rendition` camps.


The world is shades of grey. nothing and nobody is black or white. the context and magnitude of illegal immigrant separation/war criminals and muslim concentration camps are completely different.


Is more than the shades of grey; also is the other colours. And the possibility to be both or neither, too.


Yes, but you're implicitly asserting that you can distinguish between shades with more precision than is remotely reasonable.


When these great and venerable "International companies" you speak of exploited cheap Chinese sweat shop labor for decades, it wasn't a problem. Now that the Chinese want foreign companies who made (and continue to make) absurd profits from access to the Chinese market to share some benefits, it becomes a problem. Hopefully you had some moral outrage with regard to buying cheap consumer goods made in China during the former phase as well.

International companies in a rush to get access to the largest single market in the world made their own bed with their rampant and unconstrained greed. They outsourced all of their pollution and their manufacturing jobs to China, and now they turnaround and breathlessly accuse China of ripping them off. I can't accept this kind of blatant hypocrisy.


China is the world’s second largest economy. The decision to develop polluting industries and manufacture low cost goods was China’s to make. The subsequent (and likely ongoing) exploitation of Chinese labor was done by China’s system of government and capital. The same system has raised astounding Chinese numbers of people out of poverty and created enormous wealth for Chinese capital. Now that China is moving beyond the “emerging market” stage, it is entering the realm of great power conflicts. What we know is that most past great power conflicts have been terribly violent (Cold War, WW2/WW1, Napoleanic wars, etc). What we see so far is China waging a low intensity war in the Cyber warfare realm. This has the added bonus of paying for itself many times over, e.g. stealing billions of dollars worth intellectual property, eg semiconductor manufacturing trade secrets. The US has started responding with a trade war. I guess the next logical step in this escalation would be for China to become involved in violent proxy war (eg another Vietnam War or Korean War). Full scale warfare (ie nuclear war) is of course the worst-case scenario, which is always one button away from occurring.


> In order to do business in China, non-Chinese companies must partner with a Chinese company.

When will people stop droning the same tune over and over? Have you ever seen the situation on the ground? A foreign company can establish a wholely owned company in China with pretty much any business scope with 3 wide exception categories: mining strategic metals, news business (how Chinese editions of foreign media are done is a very long story,) seed stock (say thanks to Monsanto executive who was smart enough to thrown an insult on a Chinese official.) And this was true for at least a decade.


> When will people stop droning the same tune over and over?

I have learned to accept that the average HN user turns into a complete idiot when anything China-related gets posted. It's basically "hurt durr dem evil commies".

Even when it's something like "Chinese researchers discovered X" you can be sure the top comment is someone pointing out how evil their government is, adding nothing to the actual topic. Imagine that anytime something about an american company gets posted, people start commenting on Guantanamo bay, drone bombings etc.


And car manufacturing.


What's bad about sharing IP with China? That's the companies' choice. They must have done a cost benefit analysis and deemed it positive to share their IP. Did China force them to make that decision? There is nothing immoral about this arrangement.

It think the problem is that you have a mistaken conception that those IP belongs to "You" and when the company shares it with Chinese companies, they are taking YOUR belonging and giving it to others. When in the very first place, you have nothing to do with the IP in the first place.

This is by the way, not against any WTO rules, or the US and other nations would have sued China long ago regarding this.

I honestly don't see it the way others do. China is having a lot of negative externalities imposed on it by manufacturing for multinationals. At least this transfer of IP does a bit to offset those externalities. No one wants to be a sweatshop forever.

Every major industrial nation rose by taking the IP of others by legal or illegal means. That includes Germany, Britain and the United States. Besides, IP as property is a very new concept historically and countries with IP will always believe it's immoral to "steal" IP as of course it is to their advantage for morality to be structured this way. Whereas countries without will always view IP in more flexible ways. Can ideas really be property? Humans are humans, we always try to rationalize and moralize the things we do even when the real underlying reason is stark naked self interest.


They actually just laxened the rules and a non-Chinese can own 51% of the company now. In a few yesrs they plan on refucing the ownership restrictions even more.

But it’s not giving. Clesrly the international companies are still doing it and it’s because there’s still money to be made.


> What's worse is that International companies have been just giving their technology to the Chinese for years and years.

Shouldn't it be "What's better"? Or would you prefer the arrangement to not be done by 2 consenting parties?

> I try very, very, hard to avoid buying products made in China. I"m OK with every other country in the world, except China.

How does the first 3 paragraphs lead to your last paragraph?

This is the same as pharmaceutical companies entering India and knowingly agreeing to generics being produced so EpiPens don't cost 600$. You can't have it both ways, agree to pay for a burger, eat the burger then scream you've been robbed.


> International companies in a rush to get access to the largest single market in the world

and relatively cheap labor.


Why wasn’t it until 2016 until we actually started hearing tough trade rhetoric against China? It seems like they know the game is up and are doubling down on the theft.


Whatever you feel about it, the primary point of the TPP deal was China containment by isolating it from the rest of East Asia.


What game? they already won. The US makes nothing and now it is isolating itself, great move.


I don't think this is borne out by the data on manufacturing output: https://fred.stlouisfed.org/series/OUTMS


I agree, but the current situation in the US is more nuanced than the graph suggests. A lot of the growth is driven by the energy industry, like fracking, not building products like phones, computers, clothes, furniture, etc. We import 3 tons of steel for every ton we produce. Cars we manufacture in the US are dependent on imported components.


This might be an unpopular opinion, but I'll express a counterpoint - viewing the same situation through a different lens.

Put simply, the Chinese understand why American companies outsource their labor to China. Chinese labor is cheaper, and they are under no illusions - this outsourcing means that their own country experiences many of the negative externalities of Western consumption, including pollution.

It's fair for American businesses to distrust Chinese companies and distrust the Chinese government, but can't we all agree that they brought it on themselves?

Which multinational corporation reasonably expects that the Chinese government cares about their bottom line at all? And why do many ordinary Americans experience such outrage on behalf of these multinationals? Of course, I understand why their shareholders (and thus, many Americans) may be upset.

If anything, I'm angry they jumped at the opportunity to eradicate their domestic workforce to a point where China has the opportunity to steal in the first place.


You are conflating two things in this reply:

There’s the official transfer of technology that happens in some circumstances when a western company wishes to do business in China, that is known and each company makes its own decisions on if this short term trade off is worthwhile.

Americans should be angered that the Chinese, years after joining the WTO, still restrict their markets in this way while enjoying open access to other markets.

This article does not touch the above. It’s about illegal, state sponsored theft of intellectual property. Are you asking why people should be upset another country is attacking companies based in the US and stealing their technology?


You're right. I wasn't in any way trying to imply that the Chinese government was acting fairly - they are stealing and ought to be punished.

My confusion stems from the American companies who readily jumped at the opportunity to heavily depend on supply chains inside of a country with 1) a relatively short history in the WTO 2) a previous history of market manipulation and 3) rampant human rights abuses

And let's not mention that the entry into the WTO itself constituted a major overhaul of the Chinese economy, which should in itself be considered an experiment.

I'm disappointed that the risks of trade in China have been understated for so long. And systematically underestimated by American firms.

Or to put it a different way: how surprising is this situation? And does it belie a lack of proper enforcement and a lack of understanding of the risks of doing trade with China?

It feels silly to only examine the narrative where the Chinese government is at fault because that narrative is obvious. What about the culpability of our own government for advocating for China's entry in the WTO? Or the immediate handoff of trade by American corporations when the decision produced short-term gains without examining how many rapid changes China was making to its economy?


I would say that the conditions the Chinese government sets are structured to exploit a large structural flaw in the American economy, in that the decision makers in most large companies are highly incentivized to achieve short term results even at the expense of long term. So the Chinese government offers to reward those decision makers handsomely in the short run, in exchange for essentially selling the tech lead the US has enjoyed and which underpins much of the value of US enterprises.


American companies, such as K-Mart, which failed to follow their peers (Walmart, Target) into setting up supply chains in China, ended up in defeat.

There are counterexamples, but most companies seeking to wait this out did not flourish.

"Markets can remain irrational longer than you can remain solvent" - Keynes


From a consumer perspective, K-Mart was failing before everyone started rushing to China. And Walmart's US logistics was way ahead of everyone else, which is what enabled them to have lower prices. Target succeeds due to having products that actually look good, as opposed to Walmart, whose style is distinctly lack-of-style. I remember going to K-Mart, and Walmart easily beat them without needing to go to China.

I'm not sure I see what kind of supply chains Walmart has in China, since it mostly sells other companies' goods. Maybe it produces the house brand (can't remember the name) in China itself, but I wouldn't be surprised if it outsources that.


Lack of a China strategy had very little to do with why K-Mart imploded afaict. Read a bit about Lampert’s strategies if you want to get a sense of the reasons there.


It goes both ways. Why doesn't Mexico have a IP "theft" problem? Because they are only capable of labor outsourcing.

China on the other hand has a complete domestic industry, they can make everything from tiny screws to atom bombs. There are only handful of countries can do this, if I recall correctly only USA and China. These countries' government has a long term goal of a self-sufficient, independent economy in case of doomsday scenario. Rest of the world depend on each other somehow.

Thus China kinda have an strong domestic supply chain. And it would be foolish not to copy because you have the productivity and scale advantage.


I wouldn't count the US among countries that can produce anything. Of course things can change, but right now the US doesn't produce most things that are consumed internally, and it has been like that for more than a decade.


I’m not saying they shouldn’t try, just commenting on how I see their attempt being structured to exploit a weakness in US companies, which the US govt. should probably try to patch via law.


> You're right. I wasn't in any way trying to imply that the Chinese government was acting fairly - they are stealing and ought to be punished.

The Chinese government is doing nothing different to the USA government. So, of one accuses the Chinese government of acting unfairly, then one must also accuse the USA government the same way. The Chinese government is only acting in the same manner as the USA government.

If the Chinese government is "stealing and must be punished", then so to is the USA government and the same punishment needs to be handed out to the USA government.

The actions being discussed are common to all governments (and a lot of companies as well) and if you want things to change then you have to take seriously your responsibility to bring about change in your government.

I am no fan of the Chinese government and I am no fan of the USA government. From my perspective, they are both acting in the same manner and are both causing serious damage to the world in all sorts of ways. But that is a discussion for another time and place.


Sure, the US government engages in espionage. But there is a huge difference between stealing the specs of the latest Chinese fighter jet so you know how to engage against them, and stealing in order to hand it off to your own domestic industry to give them an edge.


The US does conduct espionage to help its political and economic negotiations. Its goal is to give us industry an edge too. The US isn’t performing commercial spying simply because there isn’t much valuable staff for it to steal. It’s rather hypocritical to critize one form of espionage and think the other forms are ok.


I am not talking about espionage. I am talking about the situation where the US government takes what someone who is not a US citizen and located in another country has spent two decades privately working on a technology and then when patenting it, is informed that not only has the US government taken the use of the technology but if he speaks on the details of that technology in any public way, he will be imprisoned. No objections allowed, no payments received, only punishment if he discusses the subject matter.

As I have watched him do this research and development over those two decades, I recently asked him how it was going. He only response was the above and he would not discuss further that technology to protect me, my family and his family from any repercussions.

As I have come across this kind of activity before, I take the entire "stealing of intellectual property" concept as something that governments like to indulge in and like to accuse others of the "heinous" action while trying to appear as lily white innocents themselves.

YMMV, but as far as I am concerned China is just the new USA.


Article on patents and secrecy orders: https://www.wired.com/2013/04/gov-secrecy-orders-on-patents/


The problem here is that the USA government thinks that it is above the rules of every other nation on earth. When any other national government pursues the same actions as the USA government, you really cannot complain unless you complain about them all.

So back to the point of the Chinese appropriating knowledge for Chinese use, unless you want to complain about the USA government leading the way in this area, there is nothing to complain about.

You might not like it but if you want to say there is a "moral" difference between the actions undertaken by both governments, you really are on very thin ice, so to speak.


Too bad there no public comparative statistics on technology appropriation across time, geography, origin and destination.

Or the laws which governed such appropriations.


> It’s about illegal, state sponsored theft of intellectual property. Are you asking why people should be upset another country is attacking companies based in the US and stealing their technology?

It is state sponsored appropriation of knowledge not "illegal state sponsored theft of intellectual property". The USA government sponsors this kind of appropriation of knowledge all the time, so why is anyone upset when the Chinese government (or any other government for that matter) does this?

This is simply a fact of life and has been the action of governments and other organisations for millennia.


You need to post a citation where the US government is actively sponsoring hacking of systems owned by private companies with the aim of stealing their IP to give US based companies an economic edge.

There is no analogy here between the US, EU, et al and China until you provide this.


I gave one example of this that I personally know. Over the years I have seen this same scenario discussed by all sorts of people (business owners, technologists, etc). It various ways, this has even been discussed by the IEEE.

Whether you want to acknowledge the sameness of the USA government to the Chinese government in these areas or not, the Chinese government is only following in the well trod footsteps of the USA government.

The USA as a whole had a foundation that was extraordinary, but this foundation has been well and truly eroded in the last couple of centuries. What's the applicable phrase? Oh yes - "Oh how far it has fallen and knows it not."


Americans are ok with companies outsourcing their labor to other countries... as long as those countries play fair. The assumption is that in a fair game, American's will find a way to win. But China doesn't play fair.

This is like you and me playing a game, and I find out you're a cheater.. and you say, 'what are you upset about? You invited me here'


It is a known factor of business in China that they will try and cheat you. We assume in the U.S. that at least people will act according to the moral standard set by our society but this standard doesn't seem to apply to strangers or foreigners in China.

Before you call me jingoistic I have worked and lived in China and they just have a different outlook on "scam" business there.

https://www.youtube.com/watch?v=5ncOyYzOP3w


> as long as those countries play fair

Which outsourcing destination has the same environmental and worker safety protections as the in the West?

A western factory polluting rivers and freely harming employees could compete quite well on the world stage.


I think your choice of words isn't the greatest. There is absolutely no such assumption behind the ideal of fair and open markets. The assumption is both sides benefit when competition is open and fair.


> As long as those countries play fair.

And what a coincidence, the US decides what fair is. Bombing other countries and occupying them for their oil and other resources is totally fair.


For sure. Just look at all the american companies pumping oil out of Iraq: https://en.wikipedia.org/wiki/Petroleum_industry_in_Iraq

Sure, Iraq exports more oil to China (21%) and India (20%) than it does to the US (13%).. but I'm sure that was somehow part of the conspiracy. So dont let that change your opinion.


This is a losing argument, the people (many many people) that believe these wars were all about the USA stealing oil and gold will never change their minds, they didn't get that opinion in the first place because they were thinking very logically about it or looking into it. The US having anything other than evil motives is not a possibility to be considered, so everything they do must be explained in a way that shows the US has bad intentions.

I've had these arguments with internationals living, working, and studying in America with Americans and its a dead end.


Yes, the US leveled an entire country and has been occupying it for almost 20 years just out of the goodness of their heart, grandma must be so proud, no economic interest whatsoever!

What confuses people like you is that you think selling the oil is the only way the US has to benefit from the war. The US most of all, like all superpowers before it, wants control of the market.


Exactly, you make my point. If somehow you think the US had benefited from this you are crazy. The US didn't pour billions of dollars into Iraq, no one in the region was threatened by a despot with the third largest military in the world, it was just a followup to the amazing economic windfalls of Vietnam and Korea!

objektif 64 days ago [flagged]

I never thought I would see such a comment in HN. I really dont even know where to start disputing your insanely idiotic comments about Vietnam and Iraq wars. We are talking about wars which caused more than 2 million civilian deaths.

You should leave international politics aside and go back to tech or whatever the hell you do in your daily job.


I was being sarcastic. The logic being if the United States would go to war only for economic benefit or control, then that must have also been the case for Vietnam and Korea. Which is, of course, ludicrous.


> the US leveled an entire country

The US didn't level Iraq in fact. The Iraqis leveled Iraq trying to murder each other in a large civil war that the US tried for years to stop (it could have just left instead). The US lost thousands of soldiers and a trillion dollars stepping in-between those factions. The Sunni and Shia in Iraq have hated each other for hundreds of years and immediately began killing each other after Saddam's Government fell. Saddam's 'solution' for that conflict previously was extreme oppression of the majority Shia. The only rational solution is to split the country into pieces; until then the conflict will continue perpetually.

> has been occupying it for almost 20 years

You're inventing that.

The US isn't occupying Iraq and certainly hasn't occupied it for 20 years. The US has single digit thousands of troops in Iraq in mostly supporting roles, at the invitation of the Iraqi Government. It previously left at the request of the Iraqi Government during the Obama Admin.

Please tell me how the US can occupy Iraq with a few thousand soldiers, when it couldn't control Iraq previously with more than a hundred thousand soldiers.

> you think selling the oil is the only way the US has to benefit from the war. The US most of all, like all superpowers before it, wants control of the market.

The US had dramatically more control of the Iraqi oil market before the war, with the ability to raise or lower output at will, using the aggressive sanction regime that was in place against Saddam Hussein's government. If the US wanted more Iraqi oil on the market, all it had to do is relax sanctions or look the other way as countries cheated on the sanctions.

Now Iraqi oil output is heading to new record highs, with the US having very little control over it. In fact, in your theory the US has an incentive to decimate the Iraqi oil industry rather than see it thrive. The US is the world's largest oil producer and has the most to gain from that. Projections are for US oil production to climb to 15-18 million barrels per day, far beyond Saudi and Russia, over the coming decade. It would be a large benefit to US oil producers - keeping prices up - to not have Iraq producing so much oil over that time.

The post Saddam ten year era in Iraq - the occupation - was about nation building, a foolish exercise of a superpower. The same is true about trying to prop up the Afghanistan Government vs the Taliban (a nearly impossible task). The US has vaporized a trillion dollars in Afghanistan, there is no way that can ever be recouped. The US had prior success with nation building in Europe and Asia and ignorantly believed it could accomplish a positive outcome in the Middle East.


My Iraqi friends, particularly one from Mosul, told me that the issue they had was that when Saddam was overthrown the coalition took too little control instead of too much. This created a power vacuum that allowed all sorts of bad actors to terrorize everyone else.


I would agree with one exception -- as bad as the baath party was, disbanding it and removing all its military officers was one of the watershed events that destroyed the coalition's ability to rebuild the country in a stable fashion.


This is a pretty weak argument since crude oil is a commodity and selling it anywhere reduces its price everywhere.


And what currency are all those exports in?

And all those 'reconstruction' billions and decades long military contracts don't benefit anyone I'm sure.


> The assumption is that in a fair game, Americans will find a way to win.

Perhaps that's exactly why China feels the need to cheat? From their point of view, the deck was stacked against them. They need to even the odds.


The United States has given China preferential trade deals (deals that are unfair by benefitting China) since the Nixon era. It is truly a tragedy that these two countries don't get along better.


In every game, every player assumes they can find a way to win. That doesn't imply unfair odds.


What are you trying to say? This doesn't even pass the laugh test.

You and Tiger Woods, golf, go! Good luck.


Sorry, implied in my comment is "any game both parties would bother playing" they both expect a chance to win or they wouldn't play at all.

But that aside, the point of my comment is "the opponent expecting to win, does not imply unfair odds."

"America thinks trade is good" does not imply "China gets to steal IP"


> The assumption is that in a fair game, American's will find a way to win.

So, if America fails to find a way to win, the game is rigged? I mean, if this über country doesn't find a way to win, game being rigged is the only explanation... Where did I hear this before?

> This is like you and me playing a game, and I find out you're a cheater...

No, this is like you and me playing a game and if you don't win, you accuse me of being a cheater.


Both you and the comment you are responding to are wrong because in international trade there should not be one loser and one winner. There should only be winners and no losers. That is not only possible but that is the normal state, and why the world has been increasingly prosperous. It is not a zero sum gain when two nations trade, they actually create wealth by each doing what they do best and trading.

With this understanding, if any side finds that they are on the "losing" end of a deal, they should be upset. The United States has increased its wealth partially by increasing everyone else's wealth (as have other countries) and that is the way it should be.


This isn't an argument either side is making. No one is under some delusion that China is playing a fair game. Even China themselves says they need more time to make reforms. Why do you need to make reforms if you're already playing fair?


So if the game is "fair" America wins. That sounds more like a rigged game to me.


That's not what I said. Americans assume american companies are capable of competing. If they fail, they fail.. as long as the rules were fair, no problem. There are millions of failed american companies that no american is shedding any tears over.


Amazon.cn is doing online retail business but it not successful by any means.


If the game is fair, both trade partners win, no one loses. Trade is not and should not be a zero sum gain.


> The assumption is that in a fair game, American's will find a way to win

Devil's advocate: the only disadvantage of US companies in China is FCPA.

Google failed in China because Kaifulee can not gift one iPad to a high rank communist party official. iPad were considered luxury at that time. Every other competitors do.

In other industries, some European joint adventures do govn't lobbying and media manipulation. Since media is controlled by the Chinese govn't, you must have "connections" or "guanxi" to pull things off.

If US can have exemption allowing companies have "convenient" business strategies in China, Chinese govn't and domestic copycats do not stand a chance.


One of the primary reasons it is cheaper to build in China is they do not enforce pollution laws. We outlawed destroying the environment and all our friendly harmless corporations just moved production to where it is de facto legal. If we are not hypocrites we should be rejecting any products not built to our environmental standards.


No, have bothered to google for 5 minutes to check that zero enforcement was not the case for at least a decade?


No doubt there is some enforcement but it could get a lot better and still be a disaster. They need a zero tolerance policy backed up by jail time. I was in China 2 years ago and the Beijing air was gross and half the people were wearing surgical masks. In one part a few hundred miles from Beijing I experienced eye watering choking pollution hazes with 100m visibility that lasted for several hours. It was literally scary pollution.


Yes, as long as the US tries to maintain its advantage over other countries, of course other countries will claw back their own disadvantage.

In the meantime, we're gradually building up a world community so that there isn't a sense of injustice or inequality on anyone's part. If your primary identity is human — rather than Chinese or American — then priorities are simpler. Do what's right for the world as a whole, and for humanity.

That change is too disruptive to do all at once, but it's gradually coming, generation by generation.


>the negative externalities of Western consumption, including pollution.

That pollution is their own choice. Companies will take advantage but its certainly a choice of the Chinese.

As for why China is treated differently...they act differently. America trades with many countries and China is unique in many ways.


> And why do many ordinary Americans experience such outrage on behalf of these multinationals

These are companies we all helped build in one way or another.

Their revenues boost our economy and pay for a lot of our govt services


This. These countries also export to the rest of the world, strengthening the US dollar and making our nation richer.


If we look at the history of how US dismantled its manufacturing after the 90s (yes it started way before, but it was in much smaller scope), it was WALL STREET manipulation that allowed jobs to escape to countries with lowest amount of human rights but cheapest wages. You see before then, companies did offshoring but it was in small quantities, because they feared the unions and especially the massive import tariffs that would have been thrusted on them by the government if they had gone mostly offshore.

NAFTA, which was heavily pushed by wall street and also welcomed by certain corporations, snuck in through NAFTA-friendly advisors that Clinton surrounded himself with. By establishing the principle that U.S. corporations could relocate production elsewhere and sell back into the United States, NAFTA undercut the bargaining power of American workers. Also by letting China into WTO in the 90s, China has been abusing the rules ever since, destroying manufacturing jobs in democratic countries around the world. Bush escalated the suffering by giving China most preferred status. Obama didn't do much to contest except some stern warnings against China.

And now we have a belligerent China, lead by a dictator, that is more powerful than USSR in its heydays, with signs of third-reich behaviors (muslim concentration camps, technology-thought controls), vastly increasing its military and technological weapons to confront and attack US and its allies. And technology companies are still transferring technologies to China, either willingly, unwillingly or unknowingly.

WALL STREET did this. Some corporations were complicit. Then most of them were. Bill Clinton destroyed the American workers. Every other presidents that followed didn't stand up. Trump actually confronted China.

And now WALL STREET is trying to stop the full $600B trade tariffs against China.


>It's fair for American businesses to distrust Chinese companies and distrust the Chinese government, but can't we all agree that they brought it on themselves?

And do you hold the same belief in reverse? That the Chinese have brought on this retaliation themselves? Your argument and assertion are pointless.


OT - anecdotally, I'm seeing an uptick in anti-China reporting. Are you feeling that too or is just me?

It almost feels like there is a concerted effort to confront China.

Now it could be that these articles are coming out organically from bottom to top. Meaning ordinary journalists are seeing the potential threat of China economically and technologically and are becoming more vocal about it.

Alternatively, it could be a top-down "agenda" to confront China and the media is gradually setting the zeitgeist to confront China.

What are your thoughts?


One possibility is that it's a manifestation of the broader realization that China will probably not end up democratizing as it continues to develop, in contradiction to years of mainline thought that hoped for the emergence of a neoliberal trading partner rather than a rich, technologically advanced yet despotic state.

Previous discussion of an Economist article positing this: https://news.ycombinator.com/item?id=16499939

If this is the case, it shouldn't be a surprise that reporting reflects this broader shift in outlook. However, this isn't mutually exclusive with a top-down edict, especially if the timeframe you're referring to is shorter than that implied by the broader perceptual shift argument.


Just about everything that Americans and Europeans were sold on about China, when it came to their entry into the WTO and acceptance on the global stage, has turned out to be a lie.

Not only has there been zero democratization, it has gone rapidly backwards during the Xi era. Nearly all human rights - the few that had been tangibly acquired post Deng - have been revoked in China. In the decade prior to Xi there was actually some limited freedom of speech occuring online, that is mostly gone at this point. They've cracked down on pretty much everyone and everything, even disappearing Marxist students protesting for better worker protections recently.

It was a very foolish premise by the West, to think that all nations want the same things culturally. That you can prod and shape the direction of nations/cultures in such a manner.


Australian scholarship and media has substantially changed it's tone on China in the last five years.

While there are undoubtedly some forces from "above" pushing for this change, I think that government and corporate interest is still largely aligned with China. Both out parties are fairly comfortable with Chinese investment and lobbying despite a couple of scandals in the last three years. Sam Dastyari is on of the few cases where a politician was burned for it.

The bottom up forces include several University Chinese student clubs being ousted as both funded and influenced by the Chinese government. The Australian (centre right paper) is also focussing some of its limited investigative resources on this now too. Scholarship is also showing signs of changing directions, with many of the students I know working on the soft power and sharp power tactics of the chinese government. Things like Chinese Pacific Island nation investment and debt and the influence of Confucious centres in Universities.

I'm sorry that I can't provide sources—I am at work at the moment.


Because it is becoming apparent that China is now the main threat to the West.


This pattern of behavior by China has been happening for a long time, the activity itself is nothing new. My theory is, Trump is extremely good at getting attention, especially of the many that hate him. He has put the USA's relationship with China in the spotlight, and when any American actually looks into it, right or left, it's pretty clear we are getting a bad deal.

Now more people know about it, more people care about it, or are unhappy about it, so it gets more clicks. Plus the government is going to encourage this stuff instead of try to sweep it under the rug like they might have done in other situations when trying to smooth out relations. So yea, I think the zeitgeist is definitely heading towards a confrontation with China, whether that is by design or not. There also seems to be a sense of urgency as people are realizing (too late) that the longer this lopsided relationship goes the less chance the US has to salvage anything short of actually going to war, which would probably be a near world-ending situation.


I don't think so. American media generally had the same tone for the past 20 years as far as I can remember where news segments longer than 60 seconds about China had to finish with a Tiananmen reference or something similar (imagine Chinese TV finishing every US report with "the US is currently bombing 7 countries").

I think the only difference is that more and more of the American public are now on the receiving end of the media rhetorics so people have more of an eye for these kinds of things now.


Will this top down agenda be anything different from paying journalists to send out a few PR articles for my company? I doubt not.


The story that's now on the front page of NYT is actually quite flattering on China. (And very interesting).


Did you not read the article? There has been a change in China's behavior.


Because America has realized that it’s caught in the Thucydides trap.


> OT - anecdotally, I'm seeing an uptick in anti-China reporting. Are you feeling that too or is just me?

There is always anti-[something] "reporting". The russia hysteria has died down so now it's time for the china hysteria. After that, it'll be back to terrorism or something else.

We've always been at war with eurasia, or is it eastasia? Propaganda is ubiquitous and ever present. Has to be to maintain control over a gigantic country. What's true for china, russia and the EU is also true for us.

> Alternatively, it could be a top-down "agenda" to confront China and the media is gradually setting the zeitgeist to confront China.

There is definitely a battle between the pro- and anti- china factions amongst the elites. Seems like the anti-china group is gaining momentum.

> What are your thoughts?

It's obvious top-down agenda for sure. Just like with the constant anti-facebook spam in the media. But with china, the top doesn't seem united yet.

When we see start seeing anti-china spam from recode, theverge, businessinsider, dailybeast and the rest of the second rate propaganda outfits, then we can be sure it's a solid unified top-down agenda. Another dead giveaway is anti-china propaganda comments. If we see a sudden increase of those, then we can be sure that the top has unified. Until then, all we can do is wait.


Yes, I think so. Media too exaggerated


The idea behind trade war, among many other things, is this. We are giving out our competitive edge. Getting fair trade is important, as much as the short term pain is real, long term benefits are there. US companies have been at a disadvantage in China due to government incentives for Chinese companies. This cannot go on.


It can go beyond just simple incentives as well. Uber was effectively driven out of China by the government 'picking' Didi. They wanted to reduce the size of their military but didn't want unemployed soldiers and transitioned literally millions of them into Didi drivers. You can't compete with that.


I also read somewhere where uber drivers were "given tickets" while local law enforcement turned a blind eye to didis. Definitely hard to compete.


It's funny, Chinese ride sharing companies enjoy this exact same advantage in Vancouver Canada. We remain a staunch ally.


What reading would you recommend about Chinese ride sharing companies in Canada?

And is it Vancouver or Canada that is the ally?



Thanks for the link, but would it be more accurate to call it the "LA Times euro-block" or something like that?


You could, but it's not just the LA Times that acts this way. Many websites have engaged in this behavior because of the restrictions imposed by the GDPR. Lots of issues with the GDPR...


I just got back from a trip to several EU countries and can confirm that a lot of US publishers do not appear to have been ready for GDPR. Several newspaper websites simply blocked any access from an EU domain. (Of course VPNs let you get around this.) It was also interesting to see how GDPR slightly penalizes users of privacy features by placing must-click banners or entry pages in front of every access attempt. Since websites cannot memorize your preferences if you routinely remove cookies, you get a suboptimal user experience.


Publishers knew about the GDPR; there was a two-year grace period before the GDPR went into effect, which ended earlier this year. No, it's a conscious choice rooted in business.

News websites make substantial amounts of money through advertising. These ads serve scripts which collect information about users. The collection of the information isn't strictly the problem. It has to do with storage and consent.

For any company operating globally, the GDPR created two zones of consideration: the EU and the not-EU. Data on EU citizens must remain on servers located in the EU, UNLESS explicit consent by the user is provided and the data is only used expressly for the purpose was intended.

Say you link up ad networks into your news website. The scripts the ad agencies include with their ads don't ask for consent when collecting data. This is standard practice across the Internet. To comply with GDPR, a news website would have two options: scrap the ad scripts, or just don't let EU citizens on the site. The not-EU has a lot more people than the EU, so building a separate site wouldn't make financial sense. As a news organization in 2018, you also need every cent you can find to stay afloat. Subscription models don't work for every site, so you still need to provide "free" access to the site by using ads.

Considering all of this, blocking the EU is often the best option for news organizations. Not all, but some.


There are some obvious measures that the US industry and government can take: improved cyber security, limited access to information, sophisticated employee surveillance, stiff jail term for offenders, background checks on employees with privileged access, etc. However, those measures are already in place in every company that has valuable IP to steal (and in many more companies that do not have anything of value, but like to pretend that they do).

Of course, the US government can go all in, and require something similar to the "Top Secret" classification for all employees working in sensitive high-tech fields. This will certainly reduce trade theft, but that benefit is likely to be dwarved by the damage to the economy from the loss in efficiency, loss of access to foreign labor, and the change in culture: the smartest, most creative and most energetic people often shy away from working in organizations with military-grade security.

Foreign labor is often mentioned as the root cause. Removing all foreign workers from sensitive areas will certainly make state-sponsored industrial espionage more difficult. However, history and common sense suggests there are plenty of US citizens perfectly willing to sell their corporate data to outsiders. So the benefits are unlikely to be dramatic. On the other hand, the economic cost to the US economy would be very high. Moreover, there's a chance this will backfire really badly. Today, it's hard for many countries to keep their best students from leaving for the US. If we solve that problem for them, it may be the very thing they need to close the technological gap with the US.

In general, it seems that state-sponsored espionage can only be controlled with an agreement between states, which ultimately comes down to skillfully negotiating the terms.


It's going to be unpopular.

I'd say it's the arrogance of American leads to the situation.

>> The Yinhe incident (Chinese: 银河号事件) was a false claim made in 1993 by the United States government that the China-based regular container ship Yinhe (银河; "Milky Way") was carrying chemical weapon materials to Iran. The US Navy forced the Yinhe to stop in the international waters of the Indian Ocean for a month. The final inspection report signed by the U.S., concluded that there was no chemical weapon materials at all. However, the U.S. government refused to apologize "because the United States had acted in good faith on intelligence", even though the Chinese were proven innocent.

What's not mentioned in the wikipedia page, is that US cut off the GPS of Yinhe container ship to force the search. It has been a wake up call for Chinese government.


A somewhat similar situation happened with India when in 1999, India-Pak Kargil war, the US denied India access to its GPS satellites. It forced India to have its own Regional Navigation System(https://en.wikipedia.org/wiki/Indian_Regional_Navigation_Sat...).

Countries realise that US acts as bully when they can. China just is acting in its own interest. Though as an Indian, I have my own problems with China policies, the US companies crying about IP theft is just them not owning upto their previous actions(of shifting major IP to china due to cheap labour).


It sounds like you many think GPS is property of the global community, and access to it - which the U.S. freely grants worldwide for the public good - is some kind of right. It is not. GPS was financed, developed, and deployed by the United States government, originally for military purposes. It is operated and maintained by the United States Air Force. American taxpayers foot the bill for this maintenance.

If we return to your example, we find India prosecuting a war with the use of American military technology. How exactly is it "bullying" for the U.S. to deny India access to this advanced capability? India is free to fund, launch, and maintain their own GPS alternative for Indian military purposes.


> India is free to fund, launch, and maintain their own GPS alternative for Indian military purposes

That's (more or less) what everyone is doing right now... Military use optional.

https://en.m.wikipedia.org/wiki/Indian_Regional_Navigation_S...

https://en.m.wikipedia.org/wiki/BeiDou_Navigation_Satellite_...

https://en.m.wikipedia.org/wiki/Galileo_(satellite_navigatio...

Any aliens observing us creating 4 redundant navigation systems must think we're fucking mental.


What does that have to do with the mass theft of billions of dollars of IP? So, the US stops a Chinese ship in international waters, and therefore mass theft of trade secrets is acceptable?

You're just making excuses.

The Chinese government is an authoritarian state that is completely and totally ruthless, anything thing the US has done is just a pretense for this behavior.

We're talking about a government that grounded up their own citizens with tanks and washed their remains down the drain: https://www.independent.co.uk/news/world/asia/tiananmen-squa...


It is plain and simple: if you don't have total control of the technology you are using, you'll get bullied by US government.

>> The Chinese government was and is an authoritarian state that is completely and totally ruthless.

I don't see any value in your last line.


China has every right to control their own technology. They do not have the right to steal it in any fashion that they see fit. Develop your own without violating international laws and norms. Europe, the US and most of the world competes globally without resorting to such underhanded and damaging tactics. China is one of many global citizens, not the only global citizen, and the way they interact with the world leaves much to be desired. They will learn one way or another the consequences of their actions.

>> I don't see any value in your last line.

Then you don't understand the West. Freedoms and values are important. How your government is run is important.


> They do not have the right to steal it in any fashion that they see fit.

I'm sure they'll stop doing it now that you, and American, has determined that they have no right to do so.


"They do not have the right to steal it in any fashion that they see fit"

Actually they do. As you no doubt know, the US intelligence services are mandated to 'acquire' any significant technology that the US lacks from countries that have it and make it available to US companies.

Goose-gander stuff.


This forum only has a few kinds of purely political topics and one of them, oddly, is anti-China stuff. I don't understand it at all.

About the headline... the US and its allies have stolen from and taken advantage of colonial countries like China for hundreds of years, and that is directly responsible for the technological and economic advantage currently enjoyed by the US - not western rationalism, "democracy" or some other warmed-over, quietly racist answer like that. American companies can pay Chinese people shit for grueling tasks and bring home superprofits from their labor and have been doing exactly that for decades and decades. The Chinese state sometimes goes along with this and sometimes does not and "steals" technology back.

Stop buying into this nationalistic nonsense of us vs them. You are all going to get us sucked into a world war. Instead, consider asking if the interests of the billionaires who "own" these technologies that are being "stolen" align with yours. Spoiler alert: if you're not a billionaire, you have less interests in common with US billionaires than with Chinese workers.

Class struggle is heating up in the United States and in China and competing companies have less room to continue exploiting people without violent resistance, so they need to distract people by telling them to go to war with Eastasia again. Please don't fall for it.


It's not odd at all, what is odd is how many defend China and point out the US's past sins. If China feels it was ill-treated it should ask for reparations, not freaking steal any piece of technology it can.

Furthermore:

1) China is stealing technology from everyone, not just the US.

2) They're also doing some hobby colonialism of their own in Africa.

Not to mention bullying anyone that dares call them out for their concentration camps. So China seems to be one more bully on the international stage. There's enough of those already.


I never said China's ruling class weren't "bullies". What I am opposing is the myopic belief in a nationalistic, us-vs-them mentality that transparently exists to make people ignore the class differences staring them in the face at home.

Also, ask for reparations? Like all the other times the US has happily granted those??

And finally, at least you are seemingly frank about believing that the US should be able to exploit other countries as the supreme "bully".


By definition, trade secrets are not patented, as patenting requires disclosure.

What do they mean by an "effort that pilfered as much as $8.75 billion in patented American technology"?


Using patents but not paying royalties and uncovering trade secrets through illegal methods.


You can patent a technology and not put every single parameter and process optimization and detail of supporting systems into the patent. Semi fabrication is pretty much the most complex manufacturing process that humans do anywhere.

It's like building a nuclear bomb. Any high school physics nerd knows perfectly well how it works, but the US performed over a thousand nuclear tests for a reason. The fine tuning is important.


Fine tuning isn't really that important. That's easily demonstrated by the fact that "tests" #2 and #3 already happened in Japan.


And those bombs were pathetically weak compared to modern weapons... chip fabs don't just have to turn out one wafer per year, they have to be profitable.


That would make your patent unenforceable in Germany.


I find that extremely hard to believe. If you invent a novel type of bicycle gear mechanism, German patent law requires you to write a tutorial on the most cost effective way you found to machine each part, the particular grade of steel you found to be the best trade-off between price and performance to maximize profit, and your process for assembling it in the factory broken down into the step performed at each worker's station? Do they make you submit your CNC programs directly to the patent office for publication? This is all potentially extremely valuable IP that's not going to be found in the patent filings.


This is what globalization is all about. Someone, lets say US and EU, do very costly and high skilled labour intensive R&D and then sell the results all around the world (just take a look at what is going on in genetic engineering and pharma - billions and billions are being paid in salaries and other expenses every year, look at Uber, which develops its own AI software, while losing billions, etc).

Of course, the soviets and chinese are unhappy, because they are self-proclaim themselves as being no less "great" and capable, while, in fact, they have nothing even vaguely comparable with the US R&D machine, fueled with top talent and endless investment bank's money from all over the world (Saudis, Softbank, Norwegian sovereign fund, etc).

And, of course, being an R&D hub of the world is absolute win in the long run.

The tiny Swiss being the world leaders of R&D in industrial robotics is another great example. And soviets and chinese have nothing but propaganda, false claims and unsupported imperial ambitions.


Is the complaint, then, that China gets to profit from US-funded R&D?

Because genuinely, the human race as a whole is benefiting from that R&D — and also from China's appropriation of it — by getting cheaply produced implementations!


They twist the facts quite a bit.

The alleged "stealing" of 900 files on premises of Micron Taiwan was the famed incident with loss of USB flash with "keys to the kingdom."

The biggest counterargument to US version is the fact that the alleged spy was the very person who sounded the alarm that he lost the USB flash. The only uncertainty here is about whether it was USB flash or a phone. News sources differ on that.

https://news.ycombinator.com/item?id=17375406

>An employee from mainland who previously worked at a competitor company accidentally put coworker's phone into her bag along with papers on the table. They guy thought that his phone was stolen and called police, police found his phone in a locker of a coworker.

>During investigation of that theft, they stumbled on some company docs on the phone, and opened an espionage case based on that. Why a defector would file a police report on his accomplice?


Kick them back out of the wto


I would rather kick those irresponsible suits who kept offshoring every damn piece of industry since the past century for immediate profit disregarding entirely the long term results. This is an effect, not a cause.


I’d be interested to know more about what the Obama administration threatened in 2015 that caused such a dropoff in corporate hacking, when attacks have dramatically increased in the face of a full-on trade war.

The Micron story makes me think when the other shoe will drop for another company: AMD. They are (possibly, debatably) laundering X86 IP to China through a joint venture. I guess it’s hard to steal what’s being given away?


"IP" means a lot of things. A license to produce a chip is one thing, a mask for a particular design is another, and neither one will do much to help you design new x86 products. You can see some stuff in the mask, but it's looking at the chip through the wrong end of a telescope.

I don't know on what level AMD is cooperating with those folks, do you? And even if they did sell the top-level design details, that's not Intel's implementation.


The US government has banned Intel/NVidia/AMD from selling compute units to China for the purposes of supercomputers. AMD must tread carefully cooperating in any way with them.


They can just use the Hygon Dhyana (the repackaged EPYC or whatever).


If we really want China to play nice, there need to be consequences for their actions. For example, despite all of this, they're still in the WTO. Despite all of this, we will feed them trade secrets and establish Chinese offices.

Bad behavior goes unpunished, and good behavior isn't rewarded. What incentive do they have not to steal from us? Our handling of their transgressions is naive to a fault.


We should boycott China and refuse to buy their stolen technology.


This article reads like a top-secret spy story. Its very worrying how deep their intellectual theft goes.


I imagine the anger here is the frustration that the Chinese seem to be so brazen about their IP theft, but IP theft isn't just relegated to the Chinese government and Chinese companies.

In light of all the "bad" things the US does with little oversight, ensuring US Technology is still top must be a major priority, and probably has droves of covert operations to help US companies be competitive if needed. It's just likely that the US doesn't have many sources to steal from.

I also have to believe this anger is cultural as well. As Americans, we're brainwashed into black and white thinking, and to attach very high weight to moral and ethical implications of decisions. "Always pay back your debts. If you take out a mortgage, if you go bankrupt, you are a bad American."

I expect that Chinese culture has a different take regarding what we consider "cheating."


> I also have to believe this anger is cultural as well. As Americans, we're brainwashed into black and white thinking, and to attach very high weight to moral and ethical implications of decisions.

I find it very strange that you are effectively calling culture “brainwashing”. Would you prefer we have no cultural values at all? How do you think that would even play out? Without a shared value system, you cannot have civilization.

That said, your overall point is correct: Sometimes cultural value systems differ in incompatible ways, unless reconciled somehow. Often, this means being faced with the cold, hard reality of weighing the cost vs benefit of “acting out” against a law or moral code expected of you by the other party (whether or not your culture agrees with those laws or morals is irrelevant, when we’re purely talking about tangible consequences).

If there are no consequences from us, I don’t think it’s fair we “play the victim”. If we (the US) don’t want this behavior to continue, we must specify and enforce a policy of tangible consequences that will occur in retaliation for every single instance of IP theft that occurs.


> I find it very strange that you are effectively calling culture “brainwashing”. Would you prefer we have no cultural values at all? How do you think that would even play out? Without a shared value system, you cannot have civilization.

That's an extreme conclusion from my argument--that we (as Americans) are indoctrinated into moral and ethical thinking even if such decisions aren't in our best interest, while other Americans avoid such thinking and are able to find success because they're not constrained by such beliefs.

There is much more to American values than blind obedience wrt paying back debts.

American's can have a shared sense of moral and ethical standards without creating an extreme adherence to such beliefs.


"a stunning Chinese-backed effort that pilfered … patented American technology."

Why, pray tell, if its patented did they have to steal it?

Surely they just had to download and read the patent from the chinese patent office, in Chinese no less?


Let's look at some of the facts of the case at the center of the report. This is HN after all.

1. The Chinese company paid close to $300 million to UMC, a Taiwanese fab, for DRAM technology. The deal is reportedly structured highly favorable to UMC with larger future milestone payments upon delivery.

2. The transfer was approved by the Taiwan government. Taiwan is highly sensitive about technology transfer to China. It is at the 32nm node, a relatively dated technology node.

3. UMC is the 3rd largest fab in the world capable of 14nm logic fabs. Logic fabs used to be much more technologically sophisticated than DRAM fabs. Indeed before the great DRAM price war Taiwan had quite a few small DRAM fabs surviving on second hand equipment from logic fabs and logic fabs often tested their fab startup by making DRAMs (with their density DRAMs are a great way to flush out bugs in the manufacturing process). However DRAMs are very price sensitive commodities -- being capable of making DRAMs and capable of making profits from making DRAMs are two entirely different things.

4. Micron bought Rexchip of Taiwan, which was one of those standalone DRAM manufacturers that didn't survive. All the employees accused of theft are Taiwanese and former employees of Rexchip.

5. The Chinese company, Jinhua, had earlier out-muscled Micron in Chinese court, using patents transferred from UMC to ban some Micron products for sale in China.

6. LA Times started with: "It was the great microchip heist — a stunning Chinese-backed effort that pilfered as much as $8.75 billion in patented American technology." But it later said: "Prosecutors estimate the information was worth between $400 million and $8.75 billion."


Is it because China stopped importing garbage from the western world?

Once stopped acting as the trash can and labor cost becomes higher, China becomes useless and a threat?


Idea: Every time the Chinese (or any other nation) steals technology, calculate its economic value, multiply it by a factor of 4 or something for punitive effect, and send the Chinese government a bill. If they ignore it, just raise some tariffs and tax their goods until the fine's paid.


This would work if China was a small country the west wouldn't depend on in various ways. But China is literally "too big to fail" .. the west depends on China in a myriad of ways, so they can do whatever they want.


"Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism."

Wot? Surely a reasonably decent bunch of journos should have got to grips with GDPR by now.


See my reply above for an explanation.

TL;DR: the reason is business, not necessarily incompetence.


How does complaining about Chinese IP theft square with HN complaints about IP protections in TPP? Because pretty much the whole point of the IP protecrions in TPP was to avoid the situation we see in China.


Information wants to be free, I suppose.


So?

This is just rich people whining about someone else being able to make their products much cheaper. The whole world benefits from this, just not already super rich patent & trademark holders who are anti-competitive & hurt consumers.

Can anyone even tell me a negative that isn't just capital?


By that logic why have IP at all why bother protecting investments in new technology and inventions. the system isn't perfect but you're saying that there's no merit in it whatsoever.


This distinctly isn't IP in any real way - it's not trademarkable or patentable.


There's more to IP than trademarks and patents. You skipped over trade secrets.


So, the purpose of granting patents is that companies will take the temporary protection and put their techniques into the public record, preventing the technological loss that occurs when the only people who know a secret accidentally die.

What's the idea behind legal protection for trade secrets?


Legal protection of trade secrets gives the trade secret owner the right to sue if someone steals the secret.

So if employees of Coca-Cola conspire to steal the (trade) secret formulation for Coke, the company can sue them for damages. There can be criminal offenses as well.

Trade secrets are used in situations where there's a secret (like some manufacturing process) that can't easily be reverse-engineered from the product. In that case, the owner can keep the secret as long as they wish. No patent to expire, no transfer of the IP to the public domain. For as long as the secret can be kept.

Of course, there's no legal protection from reverse-engineering a trade secret. Somebody who RE'd Coke's formula would not only be free to use it but could patent it as well. The patent holder might even be able to sue Coke for patent infringement.


Because trade secrets are not a respected form of IP.

- Patents serve to provide a temporary shelter for monopolizing new ideas and methodologies to allow them to be developed

- Trademarks serve to guarantee consumers can differentiate products and their producers

- Copyright serves to allow people to make money from creative works while distributing them widely.

Trade secrets? Trade secrets allow a company to monopolize a market with no benefit to the public in the long run. They deserve exactly zero legal protections.


The U.S. patent office disagrees with you and notes that the U.S is obligated to protect trade secrets [1].

The Coca-Cola company and defendants Williams and Dimson might differ, as well [2].

[1] https://www.uspto.gov/patents-getting-started/international-...

[2] https://caselaw.findlaw.com/us-11th-circuit/1234095.html


There is no merit. It's for capital only. Almost everything should be public domain.

What real negative effect does the OP article have on society? None, it's actually likely beneficial, just again not for the already super wealthy.


>What real negative effect does the OP article have on society?

All capital intensive innovation (i.e. anything hardware related) effectively comes to a full stop. The potential returns on capital are the only reason people invest in these companies in the first place.

It takes a shocking amount of mental gymnastics to think billions are going to be spent trying new technologies if second comers can just steal the working result for free.


> There is no merit. It's for capital

Sounds like a self-contradictory position to the vast majority that consider capital as merit.


This is just rich people whining about someone else being able to make their products much cheaper.

Stealing is stealing though, isn't it? Regardless of who benefits.


It is infringement not theft despite the extensive rhetoric to conflate the two. If something is stolen they no longer have it. If something is infringed then it is only their exclusivity undermined.

Say you own the Batmobile from a particular Batman movie and all rights to its reproduction. If make an exact copy of your Batmobile you would still have it in your garage. The value might be undermined some because it is a substitute good but only one was involved in the filming.

Infringement may still be wrong (it varies by circumstances just like how breaking a baptismal font to save a boy from drowning isn't simple sacrilegious vandalism) but it isn't theft.


Unfortunately not. If that was the case, pretty much every politician in the world would be in jail, same as all the bank execs that made the 2008 crisis happen and probably a bunch more powerful people. But it turns out if you are powerful or influential enough, you'll just get away with stealing, and maybe you'll call it something else while you are at it too.


What are they stealing? Ideas? Thoughts?


Is this a serious question? They are stealing results of very long and expensive R&D, commonly know as Intellectual Property, or "IP". Producing this locally would require a sufficient mass of experience talent and lots of time and money. It might not even be possible to catch up.

The fact that this is being stolen from Micron who presumably weren't blind to the value of their IP make it all the more frighting. None of the companies I have worked for in the past few decades would have had any chance of resisting a motivated thief as locking down knowledge runs counter to fostering innovation.


Stealing these results is a negative to society because it prevents the inventor from making profit on their inventions and from recovering their R&D costs. It is bad because it discourages companies from investing in R&D and from making advances in science and technology.


This makes me question whether it is actually a negative to society, then; should we, as a society, rely on the incentive of profit to push technology forward, if this incentive is such a fickle thing? If it depends on keeping information secret? One of the favourite arguments of the liberals and capitalists is that the free market is efficient, but where is the efficiency in companies and individuals needing to re-create the same R&D over and over again?


Usually, HN’s position on this is that it isn’t stealing since both parties now have access to it. No one is being deprived of the blueprints.


>They are stealing results of very long and expensive R&D, commonly know as Intellectual Property, or "IP". Producing this locally would require a sufficient mass of experience talent and lots of time and money. It might not even be possible to catch up.

Can you tell me how stealing these results is actually a negative to society? Is it just a negative to already extremely wealthy individuals? I'm finding no negative here and nobody is really giving me anything other than capital.


We wouldn't have modern computers if it weren't for IP laws. The semiconductor industry would have collapsed and stopped investing fab research if they could have just waited and immediately stolen any better design.

I suggest you read up on "tragedy of the commons" and maybe some basic game theory to understand why there needs to be an incentive to invest in R&D for a company to do so.


If capital is required for innovation, and capital won't invest when that innovation can't provide a return, it is a negative to society.


Capital is not required for innovation. See Open Source, Cuba's CimaVax, the Soviet space program.


The Soviet space program is an example of an economically unsustainable program kept alive by money being pumped in from external sources (govt tax revenue). Capital is most certainly required to make these programs work in order to purchase the fuel, basic materials, etc.

Open source is a good example of where innovation can work because all it takes is people donating their time. It doesn't require $15 million of rocket fuel and a $100 million rocket to make a commit to Linux.

Government-backed research works well when there is no immediate commercially useful aspect (e.g. basic sciences, space exploration), but it's incredibly bloated and slow compared to business R&D that has competition and motivation to make discoveries.

Where are the socialist programs producing processors competitive with Intel/AMD? Where is the socialist program producing an electric car people want more than Teslas?


The “ideas and thoughts” that you mention are not one-off ideas that somebody came up with in 10 minutes. The big concern is that what is stolen is ideas that are the result of decades of investment in R&D with significant monetary value. Just because manufacturing can be done on the cheap doesn’t mean that coming up with the invention didn’t take a 100x investment.


IP isn't remotely valued proportional to its investment, and a lot of highly valued IP doesn't take such efforts to create. Indeed in some cases how could it, if the innovation requires a random walk through the design space? The first company that found it might have just gotten unlucky with a path that took decades of trial and error when a different path might have found it sooner or cheaper (but no one else was looking, or were on yet another path).

In thinking over IP reform (and avoiding getting upset about China stealing it) it'd be better to question the notion that the IP is centrally important rather than phrase things just in terms of rich vs non-rich people... A starting question: even if you know all the written details about X, can you still go make your own X? Following up, for the Xs you can, can you do it in a shorter time frame than someone who already has X can develop a better X' that keeps their ROI number positive?

The current top comment on this page posits that the answers to these for many international businesses were "sometimes, no":

> International companies in a rush to get access to the largest single market in the world have freely given away their IP, because they didn't think the Chinese could ever catch up.

I don't think this logic has changed, but instead international companies have stopped innovating as much, which allowed China to catch up. (The US did the same thing to Europe.) They want to rest on their laurels for longer instead of innovating more, and IP distribution (from sharing, theft, expiration, or otherwise) does put a timer on how long you can rest.


And now that research is available to society as a whole to benefit them in an open and likely now cheap way.

Some already super rich people and companies lost money, but so what? I'm sure they'll be able to put food on their families tables until the heat death of the universe.


It’s not as simple and clear cut as you make it out to be. The IP theft actually destroys many small businesses and companies that were trying to disrupt an industry by coming up with something original. There are many cases like this one: https://money.cnn.com/2018/03/23/technology/business/america...


It is not a pros and cons style of argument that is call for. It is about dynamics.

China has learnt from japan and india that just open up and even prosper is not a oath to independence. It cunning do what it does, so when the population age and the money war started it still goes a substantiable “empire”. After all it is a Hans empire of the Middle Kingdom.

Now, the partnership and getting ip is not new. Look at the airplane espeically military one you sense they have a long plan. Just America does not. And it is just awaking.

To be honest if china is a democracy and basic human rights (which may destroy the communist but may be a even greater power), it is another japan and Eu raise up vs American scenario. And china learn those two lessons. And hence it may win. It Open to get and close up key part so that yours are mine and Mine mine. Some part like e-wall, e-market etc. are closed. They have certain market segment (antibiotics, rare metal) and some weakness like argiculture (too many mouth - 1/4 population ; not sure how this play out) and oil (but shift to electricity like car and if wind/solar/nuclear/... work it can be mediated)

But it does not have democracy and human rights. Cannot be on its side. But what if it has.

We are all Hans or we can have a Tripolar world - right wing America, middle Eu and left wing china for anyone to choose. But we are not. And the Hans may want a empire of the world. We live in a sphere and middle meant nothing and a Middle Kingdom means conquering the world.


This comment is borderline nonsensical. Please don't post comments via google translate.




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