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China Announces Punishments for Intellectual-Property Theft (bloomberg.com)
337 points by kjhughes 78 days ago | hide | past | web | favorite | 199 comments

Is there still a rule that foreing companies can operate in China only if they are joint ventures with Chinese partners?

If so then the Chinese partners can get to know all the foreign IP.

I'm sure there will be show punishments under the new law, but through the joint ventures China can still get all the foreign tech knowledge it wants.

Yes, China doesn't need to steal much of anything, because in order to manufacture in China you need to hand over your IP to your Chinese partner company. Your Chinese partner company has another partner, the Chinese Government, so in effect when you manufacture in China you need to share your IP with the Chinese government, and they share the information you gave them with any Chinese company that could benefit.

Passing all the laws won't matter, because western companies are just handing their IP to the Chinese government.

The nature of "laws" are also different in China versus a rule-based society like the USA (heck even Europe is less rule-based than the US).

Even if China nominally had a law against IP theft, on the ground in it can be very different. They could (and do as the stories below show) ask companies to "voluntarily share their methods" and when they don',t, towns can delay permits, throw up selective barriers, and put in all sorts of disadvantages that are not officially codified.

The west would be smart to wait to see how easy it really is to do business in China without giving over IP before giving China credit.

China has been playing the "we passed a new law/speech" game to buy time for a long time, but the walk is far from following the talk. I hope China is serious, but only time will tell, not the law.

Another interesting one is financial services in China. It's been closed to outside companies, but China said they would let non-Chinese companies in. Except they put a barrier that the company must have $15 billion in assets. Plus, no company has even been approved to operate there yet (as of the last reporting I saw).


non-paywall: https://outline.com/UdR3KA

UBS got an approval for buying back their stocks up to 51%.

> even Europe is less rule-based than the US

> towns can delay permits, throw up selective barriers, and put in all sorts of disadvantages that are not officially codified

Don't worry, this sort of stuff happens plenty in the US.

To the extent that it created an industry to get around it - expediters.

> The west would be smart to wait to see how easy it really is to do business in China without giving over IP before giving China credit.

Has this not already happened? HPE is majority owned Chinese company now isn't it?

What are you talking about?

There is no such thing as "laws", at least not in the same sense as any western understanding.

The first rule for any Chinese Judge is not some Right or Values, but absolute loyalty to the party.

>The west would be smart to wait to see how easy it really is to do business in China without giving over IP before giving China credit.

When will the lesson be learned!? When will the lesson be learned!? How many more dictators must be wooed, appeased - good God, given immense privileges - before we learn? You cannot reason with a CHINA when your head is in its mouth.

  "China’s courts must firmly resist the western idea of judicial independence and other ideologies which threaten the leadership of the ruling Communist Party, the country’s top judge was reported as saying by state-run Chinese News Service."

  "People’s Courts at all levels must disregard erroneous western notions, including constitutional democracy and separation of powers, Chief Justice Zhou Qiang was reported by the news agency as saying at a Supreme People’s Court meeting on Saturday."
Source: https://www.reuters.com/article/us-china-policy-law/chinas-t...

That said, rule-of-law doesn't imply anything about the sources of law. In China a Party edict may be law just as much as legislation passed by the nominal legislative body. What rule-of-law demands is consistent and uniform application of the law, whatever the source. Judicial independence may be sufficient to achieve that, but it's not strictly necessary.

Most Western democracies don't have the strict, tripartite system of government as the U.S. Judicial independence in Europe arose organically as a de facto separation of powers, just as it did in ancient Rome. Over time leaders and governments figured out that things went more smoothly if they refrained from interfering with judicial proceedings, especially when you have a high-status judicial class that self-polices (where the social status of judges is dependent on them staying above the fray of lowly personal and merchant affairs, and that social status sufficiently substitutes for material wealth that there's little incentive for corruption). To a large extent judicial independence is more normative than anything, dependent on executive and legislative restraint and more general social expectations. Such norms could in principle take hold in China even with their single-party system.

Arguably such norms are taking hold. It's just that, like with poverty, they're starting from a very low point. Depending on how you want to spin it, either they haven't come very far or they've come tremendously far.

And these companies have evaluated that exploiting cheap workers overseas is worth giving up IP for.

The more I read about the concrete problems businesses have in China, the more apparent it becomes to me that the issue has very little to with patents and copyrights. In terms of so-called intellectual property, the major issue is trademarks, which is basically about being able to establish reliable reputation and product providence, and of course state-sponsored corporate espionage that takes trade secrets.

Far more important is just the red tape, and inconsistent and unfair treatment of foreign-owned companies, which compounds the already substantial language and cultural issues.

In any event, none of these things--trademarks, trade secret espionage, and rule-of-law regulatory environment--can be significantly addressed through existing negotiations. U.S. negotiators are trying to score big "wins" on copyright and patent enforcement, but as many of us on HN already know, those things (particularly the latter) don't actually contribute much of substance to the economic engine. Tariffs are also not really a big deal considering that WTO rules already provide a floor. Like with fuel efficiency standards, the returns on bilateral agreements are substantially diminished from the outset.

I have heard in many areas the official rule on the book has already been changed. Foreign companies are longer required to joint ventures with Chinese partners. However, in reality it could be extremely difficult to operate without a Chinese partner. Local government agencies will just give you so much trouble that you will eventually find out that it is much easier to have a Chinese partner to deal with those issues.

I think this is the correct answer.

State sponsored theft of highly secret commercial/military information is one issue, rampant intellectual property abuse is another (eg. in fashion or entertainment industries).

However potentially larger problems are the 100% legal barriers to entry for foreign companies - censorship, onerous and expensive company formation, trademark registration, inability to operate in a hopelessly corrupt political environment, opaque legal system, legal requirements to have CCP ‘agents’ operating inside your company, local government fiefdoms that often operate beyond the law etc etc.

That is a consequence of the cultural supremacy of the US: the US is used to the world adapting to it, and fails miserably at adapting to the world.

We are watching it adapt, the adaptation is to cut off trade with China. Trade reciprocity should've been enacted 2 decades ago.

I can't say that being iron clad.

I will not put America in ranks with them, but I think that the biggest upside of China is that it has no such insanely convoluted tax system as in America.

It's not as convoluted, but it's just as expensive.

That said, it's their right. I get it. Their nation, their tax rules. If I don't like the rules, I'm free NOT to start a business in China. That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous. When it's all said and done, you'll likely pay more to do business in China. (But there's more potential upside too, so you need to take all these things into account.)

China and especially Shenzen has special tax exemption for high tech companies. The leadership understands that the key to winning a the economic race between countries is high tech, while other countries are still protecting older industries.

I have a friend who runs his software consultancy company out of China. It's ridiculously cheap to run a company there. Whether it's better or not, I can't really say because I don't have good tools to measure the risk, but it's definitely a lot less money than the US. Having said that, there are a lot of tax havens in the world and I'm not sure that China is the best one to set up shop in unless you are actively using Chinese resources.

Again, we are talking about the TAX SYSTEMS, not the overall business environments. Yes, I can have an entire floor full of C# programmers in Ningbo for a fraction of the cost of a floor full of C# programmers in Lincoln, NE, or Springfield, IL, or Nashville, TN. (And I won't even mention how much a floor full of programmers would cost in Austin, or SF, or Boston.) But my effective tax rate will be higher. Especially if you count "fees" as taxes.

What your friend is likely taking advantage of is the fact that tax rates are only one of the costs of doing business. So s/he probably takes clients in the US, and collects money in the US, but has the work done in China. Why? Because that way s/he can potentially enjoy a host of US tax breaks made possible by the convoluted nature of the tax system here.

The only money that needs to go to China is money to fund operations there. So your friend's profit margin will likely be orders of magnitude larger than if s/he tried to pull off a consultancy with all the programmers in the US.

Again though, the thing is, we were only talking about the tax systems, which are no better in China than they are in the US. That was my point. (On top of straight taxes, your friend might have some issues getting his/her money out of China as well come to think of it.)

It's even more interesting than that. There are no operations in china at all other than tax preparation. He hires an agency to staff the main office, which does nothing other than shovelling money around.

> It's not as convoluted, but it's just as expensive.

No running away from that, but you can't also run away from the fact that it is not humanly possible to profitably run a mainstream consumer electronics company outside of China. China stole the market not because it was making stuff cheaper than others, but because it was making it better than others.

In the end, you end up with lower net cost of running business.

> That I understand, but to intimate that it's somehow "better" than the US is just being a little disingenuous.

It is better to run business in China today, and that is nothing disingenuous.

I myself been in and out of electronics industry since 2007, and I can tell that not a single city ever came close in those 12 years to take the crown from Shenzhen.

You can't compare USA and PRC apples to apples, but China has advantages that America has no analogues for, or just anything to compare. USA plainly can't compete with China for the overall state of business climate in any real world industry.

Saying that plainly, I feel the attitude in USA is like "industry - bad, business - good." American bourgeois class has a collective psychosis, a delusion that you can somehow run a productive economy solely on stuff like banking, lawyering, consulting, and random "creative industries" that don't create anything. American bourgeois class is heading into nowhere following that path.

China does have a better overall business environment. You're correct when you assert that cities in the US can't compete as far as raw abilities.

But the original comment was about China's tax system, and that's all I was talking about. I was comparing only the tax systems. To say that China's TAX SYSTEM is better than that of the US is disingenuous.

Hmm, lets challenge that assumption too! :)

I personally know 20 or so people who had ran business in China, and been personally involved in more or less intimate financial dealings of companies in China. Good sides:

1. Tax documentation is that damn simple

2. Of all countries, it is China that understands that you don't slaughter a chicken that will be laying golden eggs. That will sound very surprising, but the overall tax policy is more or less positive towards business.

Most mom and pops shops are not demanded formal business registration, and even if they decide to legalise, many provinces have tax free or reduced tax grace periods from 2 to 5 years for small businesses! You simply don't hear taxmen making ruckus in the industry here. The worst thing about I heard personally was company's few thousand fapiao submission being subjected to review one by one for one year.

3. Smaller income tax, and in overall fever people having to pay it results in overall cheaper life for ordinary people, and cheaper workers. If you run an export business, you can see that "decoupling" effect the most. The economy is tuned to that lowest common denominator, not the abstract "middle class earner."

All of that tells that China has very different view on taxation. Plain income, corporate and individual - completely chill, but for anything like good/transactions/services/other "money in motion" taxation is merciless.

If the local government is going to deny you the services that a business requires. Then you are being mandated to join a joint venture.

> Foreign companies are longer required to joint ventures with Chinese partners.

Is that the case? If so, can we have the Real AWS back there?

And Microsoft/Azure as well?


This isn't the only issue. China has a long laundry list of laws which are on the books and rarely enforced, because the central government's power is effectively limited to making sure that local enforcement toes the Party line, and not whether local enforcement is effective and uncorrupted. There may be laws forbidden IP theft, but good luck getting any of them to mean anything when dealing with local enforcement and courts.

Remember when as a kid eating vegetables at dinner, you kept excusing yourself to go to the bathroom and consequently vegetables disappeared from your plate and in your mind you were like "this is a fool proof plan. No one will notice"? Well, China hopes you will only see its nothing but a solid business strategy for everyone yet...

It was ended for automakers in April 2018.


Please check that list yourself. Effectively, only 16 of any much substantial industries is left on that list, and that was the case for quite some time, a decade or more.

If people venture on to criticise China, can they do so with something more that Internet meme level evidence?

> Please check that list yourself. Effectively, only 16 of any much substantial industries is left on that list, and that was the case for quite some time, a decade or more.

> If people venture on to criticise China, can they do so with something more that Internet meme level evidence?

Could you share a link to the list you're referring to?

See http://www.ndrc.gov.cn/zcfb/zcfbl/201706/W020170628553266458...

Restricted list on foreign investments starts on page 22, forbidden list on page 24. The first twenty pages are encouraged.

JV has only ever been for some industries.

Microsoft, for example, has always operated in China as a completely owned foreign branch. The government even gave them cheap land to build their headquarters.

That is not entirely true.

21Vianet is the only Microsoft cloud provider allowed by the CCP. They are not Microsoft in anyway, shape, or form. In fact if you are a subscriber of their services there is a lag in updates.(presumably so the CCP can review first)

That is not Microsoft though, and it is not a JV.

Rather, Microsoft has decided to outsource its Azure cloud operations in China completely due to government regulation. It wasn't that they had to have a partner, it was that they couldn't do it at all.

Microsoft still exists in China, they still have a few thousand employees there in sales and R&D that are entirely paid by Microsoft.

While the world economy worked on real goods property had good understanding. services and intellectual property are challenging because ideas are ephemeral yet persist, and we have only social constructs to constrain them.

"I have the cake you don't unless you pay me" is very distinct from "You are not allowed to sing happy birthday without paying me"

One is an absolute. The cake is and moves. The other is an idea. You get rent from me expressing an Idea. Do I have to pay if I hum it inside my head? Do I have to promise not to tell anyone in written form? What if I change more than 90% of the notes but keep one theme?

I know this is a reductionist example, but IPR is like this: it has the terrible quality which goes to Patent process or patents over mathematics or physics. If you discover a specific dopant applied for a specific period of time in a specific way to silicon increases yield by 10%, Once the world knows this, why are you paid for the IPR licence time? If its to profit on the investment for research, remember that a huge amount of research is paid out of tax, not by investment returns. What if the counter parties invent a minor twist, or a related IPR moment? Yes.. people trade IPR rights, and collect IPR rights into agencies like the MP3 assciation.

This is a huge cancer on society. Its like CFDs. Its leveraging money moments out of thought.

International trade in real goods demands cheap. IPR demands rent which is "not cheap" -So the US demands for IPR rents on goods made in china, is like cutting your nose to spite your face: If you drive China to pay IPR taxes, you will drive china to seek IPR inside itself to avoid the taxes and charge YOU to copy them.

Better to have no IPR taxes than enforce payment.

The excuse for a limited copyright in the United States is that an author who has produced a book and has had the benefit of it for that term has had the profit of it long enough, and therefore the Government takes the property, which does not belong to it, and generously gives it to the eighty-eight millions. That is the idea. If it did that, that would be one thing. But it does not do anything of the kind. It merely takes the author’s property, merely takes from his children the bread and profit of that book, and gives the publisher double profit. The publisher, and some of his confederates who are in the conspiracy, rear families in affluence, and they continue the enjoyment of these ill-gotten gains generation after generation. They live forever, the publishers do. -Mark Twain

The questions you ask are complex legal questions but they aren’t novel by any means. There is over 100 years of case law in the US and I promise the courts have dealt with more interesting facts, cite more historical perspective, and use better logic and reasoning than you get in this thread.

Hell you could read Mark Twain’s entire statement to the House and Senate Committee on patents and walk away with a richer person and in Twain like fashion I’ll even link you his statement in perpetual property rights via https://www.thepublicdomain.org/2014/07/19/mark-twain-on-the...

That mark twain quote was pre-internet age. Nowadays you don't need publishers to disseminate your work.

All the most successful authors in the world all seem to use publishers.

All you need to do is replace publisher with online ad companies, like google, who will reap all the reward. Say there was no publisher you, me, everyone publishes Harry Potter books on our website. People will use google to find them and google AdWords on own websites to try to monetize someone else’s property, but Only the ad company wins.

Honest question have you ever created anything of value that someone with deep pockets cane along and ripped off?

Twain's quote seems to be that when copyright expires, the retail price of a book stays the same, just the publisher stops paying the author (or their descendants).

It's a long time since something went out of copyright in the United States, but I've seen similar things in other fields. In ~2008, Saleae figured out a way to make a (24MHz 8-channel) logic analyser with an off-the-shelf microcontroller, and sold it for $149 [1]. Today, you can get a chinese clone using the same microcontroller for $9 [2].

Seems to me the retail price didn't stay the same, rather it dropped by 94%, presumably due to multiple clone manufacturers competing on price.

[1] https://www.adafruit.com/product/378 [2] https://www.banggood.com/USB-Logic-Analyzer-24M-8CH-Microcon...

Removing the context from copyright into the larger umbrella of IP (patents and trademarks) you touch on the other half of the coin (consumer experience) whereas obviously Twain focused on the creator side.

From the consumer side, I don’t purchase anything from amazon because of the counterfeit problem. Now consider counterfeits scaled to every facet of your life. In a world of no IP protections consider walking into a mall and seeing 10 Apple stores and not knowing which is the real Apple store selling real products, and which are low quality fakes. Consider the problem with fake negative reviews by competition paid for by competition scaled out to fake, shit products to destroy good will in your company/products/brand.

The Twain quote says "[IP right expiry] generously gives it to the eighty-eight millions. That is the idea. If it did that, that would be one thing. But it does not do anything of the kind."

I propose copyright and patent expiry _does_ do that, as illustrated by the example of a logic analyser being 94% cheaper.

Trademarks are another matter, I agree.

You’re talking about price. That’s not what Twain was talking about, read the statement.

In your example, Twain would have been the original creator and owner of the equalizer IP. He could have licensed that to one or all of the manufacturers, it’s his choice, so if he licensed to many manufacturers and one sells it for 94% cheaper the consumer has their choice, but whether you buy the generic or name brand the Creator is going to get paid a royalty for their idea no matter what.

But the law says after a term the government takes the creators idea and gives it to the public...but that’s not what happens, really what happens is the government takes the creators ideas and now says deep pocket business can now make money on the creators ideas....like in your example, you didn’t take the IP and make it, you bought it from another company who cut the creator out and they are making money.

Further what Twain would say is...well why doesn’t the government come and take the property of the manufacturer (like the actual land, building, machines) after a term, is there really any difference between Twain’s ideas that manifest into a book or the business owners ideas that manifest into the business (land/building/machines).

What do you think Twain means by giving it to the 88 million? When he says "If it did that, that would be one thing" what do you think is the "that" he's talking about, the acceptable result of copyright expiry, in terms of regular people reading his writing?

I don't think Twain expects that out-of-copyright books should be available for less than the cost of paper, or that everyone would have a printing press at home, or that he was anticipating photocopiers or smartphones or e-book readers.

I think Twain meant a larger number of people having access to the content, such as by serialisation in newspapers and super-cheap printed copies.

That is a trademark issue though. Most of the criticisms of IP seem to be about patents and copyrights, not trademarks.

> International trade in real goods demands cheap. IPR demands rent which is "not cheap" -So the US demands for IPR rents on goods made in china, is like cutting your nose to spite your face: If you drive China to pay IPR taxes, you will drive china to seek IPR inside itself to avoid the taxes and charge YOU to copy them.

Back in Shanzhai days, there was a popular saying about the attitude of American "Big Business" to Chinese industry: "you do all the hard work, and we will do all the money." That's a very equitable separation of labour :) American Big Co. people are mad because they can't continue doing that.

Seems like a believably self-serving local attitude held by biased humans thinking in their own self-interest.

Funny how these kinds of accusations work, no? :)

> "I have the cake you don't unless you pay me" is very distinct from "You are not allowed to sing happy birthday without paying me"

Sure, but what about "You are not allowed to make this cake unless you pay me"?

There is no strict gap between what is and what is only an idea, which is what you seem to be implying.

The problem isn't about what exists and what doesn't, the problem is a (necessary) bug in the way value is assigned.

You can’t copyright a recipe

But you can copyright a list of steps to make other things.

The expression, possibly, though strong limitations exist. The functional consequence or idea, no.

See Sega v. Accolade or Feist v. Rural Telephone.



Patents cover ideas and inventions, including processes.

No, it is pretty clearly established that lists are not afforded copyright protection.

If you're being literal, sure, but you can copyright an algorithm.

Nope, but you can patent it with a bit of fiction about inventing a computer that performs the algorithm.

The US has a 150 year head start on IP production, of course it benefits us to play by these rules. It also benefits China to say “yea IP isn’t real” but then again neither is the idea of the chinese nation or the unified states of America. human rights and property are also intersubjective reality.

Human rights turn out to be very real to people who do not have them.

When the world economy worked on real goods, people frequently started wars to take them.

criley2 78 days ago [flagged]

I feel like your (and most) anti-intellectual property arguments are built on terrible strawman, so let's go through your terrible strawman.

>One is an absolute. The cake is and moves. The other is an idea. You get rent from me expressing an Idea. Do I have to pay if I hum it inside my head?

Obviously not, and to suggest that intellectual property laws would require rent payments for thinking about a song is so odious and unfair that the speaker must be assumed to be acting outside of the realm of honest discourse.

>Do I have to promise not to tell anyone in written form?

? How is your concept of intellectual property so divorced from reality? In what country does one make a promise not to hum a song to a rights holder in written form? This beggars belief that you are anything other than some uninformed radical.

>What if I change more than 90% of the notes but keep one theme?

As with all of intellectual property, unless you are attempting to commercialize your idea, you aren't going to be seriously targeted for using someone's intellectual property.

I struggle to treat this post as anything but the uninformed ramblings of a true radical. I mean, could you at least pretend to have a real world understanding of intellectual property when you create your examples?

Here's a question for you: Have you ever created anything in your life with value that could be protected by intellectual property laws (copyright, trademark, patent, etc)? Have you ever created anything of value and given it away? Or are these ruminations about intellectual property purely hypothetical?

Are you sure you're on the right track? The least you can do is not make the same mistake that you're accusing other of.

> How is your concept of intellectual property so divorced from reality? In what country does one make a promise not to hum a song to a rights holder in written form? This beggars belief that you are anything other than some uninformed radical.

Fallacy: 1) Ad Hominem

> As with all of intellectual property, unless you are attempting to commercialize your idea, you aren't going to be seriously targeted for using someone's intellectual property.

Fallacy: Appeal to probability

> I struggle to treat this post as anything but the uninformed ramblings of a true radical. I mean, could you at least pretend to have a real world understanding of intellectual property when you create your examples?

Fallacy: Ad Hominem

> Here's a question for you: Have you ever created anything in your life with value that could be protected by intellectual property laws (copyright, trademark, patent, etc)? Have you ever created anything of value and given it away? Or are these ruminations about intellectual property purely hypothetical?

Fallacy: Ad Hominem

You could have ended your post by pointing out the fallacies, but Internet has taught you to go a step further (Look at me doing the same thing)

Fallacy: Fallacy fallacy.

The worst kind of munchkin is the one that thinks A) a fallacious argument is a wrong one B) that reducing arguments to fallacies is a beneficial way to communicate and C) who misuses fallacies as a tool to avoid arguing merits.

For shame. Utterly, you provided the worst response possible. Meta, petty, inherently fallacious and ultimately pointless.

As with all of intellectual property, unless you are attempting to commercialize your idea, you aren't going to be seriously targeted for using someone's intellectual property.

Yeah, tell that to Thomas-Rasset. Ordered to pay $220,000 for sharing 24 songs on Kazaa.

Many others have had their internet connections cut off or worse.

Come on, sure you can produce historical outliers, meanwhile, the vast majority of every person reading this has stolen far, far, far, far more than 24 songs worth of software and media.

It's absolutely absurd that you would ignore the reality on the ground for hundreds of millions to pretend that the ultra-rare exception is somehow the rule.

Be honest: have you stolen ANYTHING online ever? Have you ever been caught?

I have infringed on copyright, and I have gotten two warnings over it, which were enough to get me to stop doing so on my home connection.

Well aside from your snide tone this is actually a good rebut. Since I've earned money from IPR and earn money from working on openly available code I do actually understand more than one side of this story. Chinese IPR theft is not about mp3 downloads. It's industrial in scale and extent. I believe it's self abnegating because they would do better to overcome it by out competing. But IPR is a very odd social construction which in modern terms applied to services and not goods probably impedes the "march of progress" more than it helps regarding inventors. Truly, it just sucks money out of emerging ICT and replaces it by rent seeking behaviour.

In real goods, trade protected methods are as good. Cost of inventing is a compete mishmash, most fundamental IPR lies in publicly funded research. Much medical IPR is ethically complex. Human DNA patenting had to be fought off. Monsanto and Roundup resistance and wild crossbreeding.. wierd law.

So.. stripped of your ad hominem you make good points and I made facile ones. Well done.

Why be an arrogant prick btw? Is your ego on display here? Can you not think beyond the words to the concepts or are you so glued to IPR income models that even theorized weaknesses offend you?

What flaws in industrial IPR can you acknowledge?

Do you think the google-Motorola-lenovo sell around patents in mobiles and other things was sensible? I mean sure, it defended googles core business but it was a giant potlach of competing patent baskets. Samsung and Apple at war is good for who ? Cisco holding patents on sfps? Epson and chip marked ink cartridges? C'mon man, these are broken business models.

China is big. It's a big market. We can build a better market and not give in to protectionism. IPR fights are all about keeping money in the USA but cheap labour in China.

This post is all critique but no counter argument, all style and no substance. Maybe include some concrete examples?

1. Patent violation is already a commerce code offence

2. Same for trademark violation

3. Same for media products reproduction rights

The only thing that this changes is that anybody indicted is automatically distanced from the state system, something you can consider a privilege actually...

I knew an expat chemist here who had hard time declining very assertive solicitations for investments into her company from all kinds of state run funds, including ones ran by Norinco and PLAF out of all things. Her product was a variable viscosity fluid that was said to have a world record for vibration dissipation.

So vexatious they were, she had to hire a lawyer to find good excuses for not taking their money, without losing any of perks, and access to government tenders.

In the end, she went on taking money and facilities access from the infamous "plan 3315," and now has to spend more time hauling legal papers than actually running her factory.

What is plan 3315?

A borderline bribe like incentive program for foreign scientists, and businessmen to set up shops in second tier cities in China, a part of this initiative http://www.1000plan.org/

Effectively free 3 million bucks for a pretty business plan and reputation for as long as you are a foreigner. For this very reason people call it out for throwing money away, and questioning why they can't spend that much on China's own talent.

I'm 100% as interested in Market Access as I am with IP theft. I'm sure there are small and large companies with IP concerns but overwhelmingly, this is a large companies game since they are the ones doing really heavy R&D lifting on new materials and technologies. For startups, genuine market access to China would be such a fantastic opportunity.

As a real world example, the fashion industry in China is hopelessly awash with fakes and copies. There’s very little enforcement of that kind of intellectual property, and also such high barriers to entry for say small/medium European fashion brands that they have no options. Chinese counterfeiters make money hand over fist ripping off US/EU designers, often working with the same factories producing the legitimate products for export.

When a small/medium EU clothing company can setup their own Taobao store easily and cheaply, sell online without overwhelming competition from counterfeiters, repatriate their earnings without significant issues, then perhaps we can consider the playing field levelled somewhat.

Yeah but you can't even do that here in the US. (Maybe you can do it in Europe? But I'm skeptical.) I mean, the problem of counterfeits on Amazon is legendary here in the US. And not all of the counterfeits are coming from China. The way you work around that in the US is to get in good with the buyers for the big boys. Say, something like Target. QC at Target will be a lot better than QC at Amazon, and Target will move diligently to quash any counterfeits they find anywhere. Now, of course, that's like winning the lottery. It's just not going to happen for most of us. At the same time though, that's how you get successful in fashion here in the US. On the one hand you make Target or Nordstrom or whoever much richer, on the other, you get rich too.

I've said this before, and I'll say it again. China is the same as the US in this regard. If you're looking to access China to get rich, you're doing it wrong. You'll very likely fail. (Unless you're a six foot plus black guy with a wicked 3 point shot.) You access China to make someone in China rich. You'll experience a good deal more success doing things that way.

This is a very false equivalence. Your fashion specific example doesn't support your broader claim that market access is comparably difficult in US and China. The facts says otherwise pretty starkly.

And even in the context of GP's example, the small/medium Euro businesses are in high demand. That's why the counterfeits are selling to begin with. If you're an in-demand fashion brand, it's not as hard as you describe to get into big retail or open boutiques.

I wasn't talking about the broader market, I was talking about the fashion market.

The fashion market in the US and China are comparably difficult for a US based business to access. That's just reality. I didn't comment on Euro businesses, because I don't know how things work in Europe. But I doubt that you can get into Nordstrom, Target, or what have you as easily as you claim simply because you are European. Maybe you mean it's easy for Euro fashion houses to get into EURO retail outlets. But American outlets are just hard to access for everyone. That's just reality.

Chinese market is hard to access too, again, just reality. (Again, it gets easier for an American if you are a six foot plus black guy with a wicked three point shot who's already famous in China. His success is more a function of popularity than access.)

Sounds like the Chinese are only selling defective products that westerners won’t accept.

That’s not correct.

Especially with low-tech products like clothing, you can easily buy fakes that have equivalent (or better) quality than originals at 1/5th of the US/EU price. You’re not paying expensive EU/US staff wages, company taxes, export costs, duties, design fees, branding and marketing costs. The base cost of a $120 pair of NIKE shoes is around $10 - it’s easy to find counterfeit Nike that cost $20 with great quality.

> Especially with low-tech products like clothing, you can easily buy fakes that have equivalent (or better) quality than originals at 1/5th of the US/EU price.

As a consumer I 100% approve of this practice, go Chinese clothes manufacturers! And I can use the $110 that I saved by purchasing a product/service from an industry that doesn't rely on rent-seeking (IP is mostly rent-seeking nowadays).

I kind of agree.

Western consumers are so removed from clothing production that they’ve lost sight of how vast the gulf is between real and perceived value. Paying 10x or 20x the manufacturing cost for what is essentially a commodity item with zero technology or innovation is insane.

That said, brand and design do have some value. There’s a reason why Chinese consumers and counterfeiters have insane appetite for western brands, but western consumers would struggle to name a single Chinese clothing company.

> You're not paying [...] marketing costs.

While the average counterfeit probably spends 1/1000th the marketing cost Nike does per dollar of revenue, without any marketing there could not be any sales.

I have seen in Western outlet stores a greater likelihood of encountering clothes with threads hanging out or extremely minor misalignments.

I assume it is the case in the East.

Outlet stores are specifically built as places to dump manufacturing errors.

Chinese factories are also able to manufacture excess high quality inventory beyond what their foreign customers order.

Amazons sales seem to be doing ok.

digital property should not work under exclusive principles (unlike physical property which has to).

to force exclusionary constrains upon digital property means we choose to abandon one of the key advantages of digital information.

it means we favor owning things over being free.

Why not? There is more merit to exclusive ownership of digital property than physical property. My entitlement to my yard is pretty comical—that land was there a billion years before I was born and will be there a billion years after I’m dead. But Captain Marvel? That’s a thing that only exists in the universe due to the labor of certain humans. Why shouldn’t they own it?

A person can enforce ownership of their physical property by themselves. Intellectual property enforcement requires the massive power of the state.

One might argue that we should prefer a world in which that sort of massive power is used sparingly.

"A person can enforce ownership of their physical property by themselves"

Except in reality, you don't. The state very strongly enforces your property rights that's a good chunk of why the police exist, and most people do not own guns.

The OP argument is not unreasonable.

To wit: in Canada, there is actually no enshrined right to own property. The far left party opted to keep it out of the new constitution written in the 1980's so Trudeau Sr. was forced to keep it out if we were to have a new constitution at all. So it's an intellectual concept.

I'm not sure if I completely agree with "Except in reality, you don't."

In some sense I enforce ownership of my house just by living here. Someone is here most of the time. The lights are on. There is activity. That keeps others out.

If I just abandoned the place, eventually someone might poke their head in and see if there was anything to take. Sure, that would be illegal, but the cops aren't going to post a guard for me under most circumstances.

You actually see this happen in downtrodden neighborhoods where whole blocks get abandoned. In theory that property is still owned by someone, but without anyone actually there, eventually houses get stripped of valuable goods and in some cases squatters move in.

https://en.wikipedia.org/wiki/Defensible_space_theory is an academic theory of this point of view.

Another good example is house sitters. When traveling for extended periods of time, people will let trusted 3rd parties stay in their house for free. Why? Enforcement of property ownership.

If there were no state, your 'occupation' of the residence would be meaningless, guys with guns would take it from you.

It's feudal based on hard power in one way or another.

The way it's set up now is the cops enforce a common set of rules we agree upon.

You don't have the power to enforce your property rights. Nobody really does.

Again, I don't think that's really true historically. Even in pre-state societies or in present day societies with failed or weak states people still have homes that they live in consistently from day to day.

Sure, sometimes the dudes with guns show up and force them out, but that isn't a constant occurrence.

Yeah but well before your presence is a relevant factor in preventing squatters, everyone in the whole equation has long been socialized to understand that you can't take other people's stuff without dire physical consequences. That is 100% the power of the state and 0% you.

I don't think that's true either.

When my 3yo kid takes a toy from another kid without asking and I tell him he has to give it back, that's socialization and that's not the state.

dude, how hard is this to understand? if a group of dudes with guns were to rock up to your house and say 'get out, this is our house now', you would not be able to do shit unless you somehow go john wick on them. the monopoly of violence and enforcement of rules within a territory (a state) is the foundation necessary for property rights.

just because we don't walk on all fours and smell urine for information doesn't mean that we would not revert back to aggression and dominance if you remove all manmade recourses for settling disputes and enforcing property rights. why on earth would you think people would respect ownership of goods when you can just take what you want through intimidation? all ordered systems are at the mercy of entropy and it takes effort (i.e. the state) to maintain such order. it only takes one person to step out of line in times of anarchy for others to realise that it makes no sense to cooperate and follow rules when there is no one to enforce them, sending the whole system back into chaos.

Seems awfully close to "might makes right".

bc you are manufacturing scarcity and enabling rent seeking which is a pointless tax on humanity as a whole for the benefit of a few.

"Rent seeking" is by definition trying to extract payments ("rent") from value you didn't create. Charging for access to value that results solely from your act of creation (like "Captain Marvel") is literally the opposite of rent seeking.

Aren't you a lawyer? Copyright is a textbook example of rent seeking. After the first copy is sold, restricting re-copying is rent seeking: extracting money without adding more value.

Show me a textbook that uses that example, because it would be a shitty textbook. You’re not creating additional value after the first sale, but you’re also not recovering the full market value of the creation from the first sale. Imagine painting the Sistene Chapel and charging $10 a pop to see it. Is that rent seeking?

You are conflating physical property with real property (aka real estate, land)

because it's a slippery slope that seems to constantly slide away from liberty and towards property for most of civilization's history.

there's gotta be some equilibrium, which is precisely why copyright was originally intended to be a temporary thing.

Temporary, yes, and it should also have certain exceptions.

Exceptions should include things like reverse engineering for making compatible accessories or compatible competitive products. They should include fair use for critique and criticism. They should include the right to resell your property and to repair or customize your own copy of a property. There are probably valid and important exceptions I'm not listing.

During that limited term and subject to those exceptions though copyright should be solidly enforced. Otherwise the people creating things will just be ripped off wholesale by people who do nothing but rip them off and relabel things.

Now, I think the copyright term is far too long. It is especially too long for abandoned works. I'd like to see something akin to trademark rules applied to copyright, in which if you're not offering a work or a work directly derived from it for X years the term ends early. The maximum term should be a bit shorter than it is for the specific work, too, but I think suing people for copying or modifying something you are no longer willing to sell them is asinine.

It's an interesting principle, but if you want people to adopt it, I think you have to show how the benefits are greater than the costs.

America's first copyright law goes back to 1790, or about 200 years before most people owned computers. It was adopted because people saw benefit in rewarding the people who created books and maps. We've extended IP protection over the years for reasons bad and good.

If you want to get rid of that, you need to explain how we'll get the same or better benefits with your approach. Because from my perspective supporting the current system means means I favor writers and musicians and researchers and artists getting paid for the good things they create over abstract principles.

I don't necessarily agree with the parent, but the current system supports publishers, journals and rights-holders far more than it does artists and researchers.

Until we have a popular means of paying artists directly, or self-publishing, this will continue to be the case.

Sure. Some of that's illegitimate, but some of it definitely isn't. Publishers do valuable things too. For example, writer John Scalzi here answers the question of why he doesn't self-publish:


(See under "Why are you sticking with traditional publishing!")

And I'll note that in addition to the obvious functions of editing, marketing, talent development, and vendor management, they also provide capital. One could say correctly that it's perfectly possible for software to all be sold by single individuals. But most software is produced by companies, quite a lot of whom take up-front investment.

We do have ways of self-publishing or paying creators directly: the internet. Anyone can pop up a web site and start selling their wares with minimal fuss. It costs a couple of thousand bucks to set up an internet-based company in the US, with the majority of the money going to incorporation. Payment processing services, payroll services, tax/accounting services, hosting services, etc. are all super-cheap and don't require a lot of work.

Sometimes I have to stop myself from constantly grumbling "kids these days...", but wow, I'm seeing a lot of young people erecting mental barriers to acting on their dreams and aspirations. It's never been easier to make money in this country, but you have to a) put in the hours, b) stop giving away your stuff for free, and c) manage your expectations - nobody is saying that you're going to win the lottery by becoming the next Google or FB.

> America's first copyright law [...] was adopted because people saw benefit in rewarding the people who created books and maps.

that seems contrary to wikipedia:

The 1790 Act [...] specifically noted that it did not prohibit copying the works of foreign authors.

it seems obvious the act was meant to reward some people. please drop the humanistic angle, it's simply not there.

It can be humanistic and nationalist at the same time. I think that's actually a good way of reconciling the common narrative you hear from either side.

It can be intended to spur creativity and innovation (and do so) while also being captured and circumscribed by different interests (in different ways over time).

This would include big identity-based interests, like nationality or ethnicity, that have been relevant in the history of this country (and every country).

It can be economically productive and unfair at the same time. So, do you work to make it more inclusive and target the benefits better? Or do you give it all up, the good with the bad?

> it means we favor owning things over being free.

That statement lacks a lot of nuance and presents it as a binary, mutually exclusive choice. Absolutist stances like this don't help the situation which is rife with many use cases that are and aren't valid. You can have this as a general principle you prefer, but it cannot work as an hard-fast rule for all digital properties.

Nuance does not make something more right or more wrong. You can be absolution on a topic and still have as much thought and care put into that position as someone with a laundry list of exceptions to either side of the argument.

Well of course, ironically that general statement is true sometimes. But in this case, I think a general, absolute stance on digital ownership is folly.

I agree... I really advocate for an equilibrium between property and liberty.

But throurough my short life on earth I've perceived a stronger pull towards property which (again, seeking equlibrium) makes me use a more extreme language in support of the other viewpoint... counterbalance.

I hope you find, as you get older, that it's better to strongly advocate a balanced and considered message, rather than a simple but extreme one. Extreme positions may be more emotionally satisfying, but they bring a host of long-term disadvantages. An easy example of this is the current division in US politics due to extreme positioning.

Copyright is much like serfdom in my reflection - its a system I have tried to consider both sides of, and no matter how I think about it the ends never justify the means.

In my experience its no different than the hyperbolic policy of hiring people to fill in holes someone else dug. Its a market built on fiction to feed the special interests that profit from it.

And my position has just grown more extreme in the last decade - I originally thought compromise had to be right because copyright has become so pervasive so relatively fast in human history it might have had merit. But in the day to day action of actually creating information in myriad forms and interacting with it I can't obscure the reality that none if it is meant to benefit anyone but a select few who built (or in modern times dramatically expanded) their temple to IP to feed their own greed.

How do you propose people be compensated for creative work? Who would spend a year on a project if they could only sell one copy for $15?

Yes, I would like someone here to provide an answer to this question.

For example: We're just wrapping up a new release of one of our products that I've been working on since August of 2017. It has over 1400 hours of work dedicated to it (single developer - myself). There's no way that we could possibly dedicate that amount of time to a software project without knowing that we could recoup the costs.

The trick is almost all creatives are already paid in the model most fitting the production of information - people that want the fruits of their labor pay them to make it. Very few software engineers, for example, are living off copyrighted sold copies of the software they wrote. The company they work for might, or some other knob in the chain, but for 99% of us we are not directly using copyright as our source of income - someone else is.

And that is the trick. People want software. We threw this extra, pointless step in the middle between "people C want X software" and "pay people D to make X" in the form of "have publishers / corporations P pay people D to make X to sell to C".

Every conservation on this always functionally boils down to "but that is so different from the way thing are now!" which of course it is. Its the same reason why the market for prohibited drugs is so much more convoluted, dangerous, and disconnected from regular commerce - you make things more complicated, like criminalizing posesssion of the good, or enabling the profiteering off information, and the market will warp to both meet demand and maximize profit using the framework the government provides to do so.

Its really no different from how you are told to get started in music or art or even how to get a job programming. You make stuff for free to start out to get a portfolio of work proving you know what you are doing. Once you can prove your ability you ask for money to make more, be it words, art, designs, code... its how the world has worked for all time. It is only in the last two hundred years this model of "make stuff and ask for money later with the backing power of the state" perverted commerce. And all of us commoners never even got to benefit. We still work in classical employment. We still need to do the work for free to prove we can make more information in the future. We still get paid for our time, not the fruits of our labor. Which is fine - its how the whole rest of the economy works!

There is only one scarce thing in the creation of new ideas and that is your time. You should be charging for it. Its all thats worth anything in the equation of creativity. Most people do charge for it with salaries. The world still predominantly runs in tandem with reality. Its only a very few people who get to throw a state backed wrench into economics to rent seek already made ideas.

So, how is getting paid for one's time any different from being paid for the value of one's labor ? Do you think that economic theory doesn't apply in that case, and that, somehow, a person isn't going to just simply demand a huge salary that results in the same compensation ?

And how to you prevent someone from just creating a piece of software, keeping it to themselves, and then charging others if they want a private copy of it ? Are you going to demand that software developers release their code to the public, and enforce that through the state ?

What about live performances ? Are you going to mandate that performers invoice each person in attendance for their time ?

I suppose the tricky thing about advocating a balanced message in this specific topic is that nobody really knows what a good working equilibrium should be regarding these issues.

I mean, it's a contentious issue for China and the USA...

My view on the matter is that us (as global humans in a global civilization) have yet to figure out how to strike a balance in this world with an Internet.

On the other hand, plenty of well educated people seem to grow up and reach the opposite conclusion - that the only solution to some endemic problems, which keep occurring despite changes in leadership, is a radical one. Simplicity sometimes is the best solution.

the radical, out-of-balance and ill-considered message was mainstream not that long ago. it's only seen as "extreme" by some because the Overton window has moved considerably. case in point: US politics.

> to force exclusionary constrains upon digital property means we choose to abandon one of the key advantages of digital information

You forget that another key advantage of digital information is that we can have a digital economy.

I'm skeptical of the idea that this is an advantage.

I am more interested in being free than having an economy.

then again, I speak as a human being, not as a profit motivated institution.

These arguments are pretty weak and end up doing more harm than saying nothing.

There are strong arguments in favor of limiting copyright as it was originally intended (in the US constitution at least). Where the limited time monopoly exists to incentivize people to create, but where the goal is to promote the progress of science and useful arts for the public benefit.

Long term ownership and control can stifle science and art with owners shutting down tenuously connected derivative work.

I need to ask you an honest question: have you every run your own business ?

If not, you should try it, it's a really eye-opening experience that will give you really valuable insight into the world that we live in. The one thing that you will learn is that we are all creatures of the environment we operate in, and very few of us actually have economic/political power that extends very far, so one should always be very careful about ascribing ulterior motives to other people. Most of the time, people just want to make a decent amount of money so that they can have a nice life with their families.

Which is fine, but don't be surprised if the majority of the people choose to do other things and not produce the very thing that you want produced.

Jaron Lanier talks about this a lot in his books and speaking engagements, and I would highly recommend his books for a better perspective.

why would any company invest in R&D if it could just be immediately taken for free?

Because their competitors are doing so, and would be able to outcompete them at the point of sale based on price.

Something something open source

The idea is stealing is not a black and white concept. Stealing something digital generally has very different effects than stealing something physical.

For example, if someone the software I own without my permission and doesn’t give it back; I loose out on revenue I would have otherwise received from them. If someone uses the car I own without my permission and doesn’t give it back; I am out thousands of dollars, I have no means to get to work, and no means of purchasing groceries.

Stealing is not black and white and rules and regulations should reflect that.

What?! Stealing is a super simple concept: what the owner will not give, the thief takes anyway.

You could try to argue theft in contexts where the owner's willingness to give is ambiguous is not clear-cut (eg taking one piece of candy from the jar is fine but taking all the candy is theft), but that's ambiguity in communication and cultural convention, not in the concept of theft itself.

Really it isn't stealing in intellectual content period - it is infringement. There are many groups conflating the two but they have very distinct meanings.

In order for something to be stolen it must be taken away. If you make an award winning painting and hang it on your mantleplace and I paint a perfect copy of it that doesn't mean that it is suddently missing from your house. I may have devalued it and I certainly would have infringed but not stolen anything.

Even ownership has such radically different meanings between the two they probably shouldn't have the same word. There is a vast space of things that nobody owns called the public domain. Saying you can't own a chair would be a bizarre invasion of rights. It doesn't matter how long chairs have been around - the fact it existed in the wood age doesn't mean you can no longer own one.

Saying that you own the concept of all chairs and all must pay tribute is a downright bizarre megalomania. They have existed from the wood age and long before any current civilizations were even alive - to claim exclusive ownership of something so universal and ancient is absurd.

Intellectual property isn't a natural right by any means - it is a pragmatic policy granted by governments meant to serve a purpose. It operates based upon treaties in the first place.

A hypothetical newly discovered underwater civilization copying from our airwaves would not be cause for military intervention. The same underwater civilization robbing freighters for cargo would be cause for intervention.

You’re right—the use of the term “intellectual property” has muddled public discourse on this important issue.

Society as a whole benefits from a robust system of copyright, trademarks and patents to incentivize art and innovation. But just as too weak a system will slow innovation by making it less financially viable, too strong a system will slow innovation by making it harder and more expensive to build new things out of old ones. We need to strike a balance, but the popular notion that ideas and expressions are strongly analogous to real property will likely lead to policies that are, on balance, harmful.

That IP law in the U.S. was conceived of as an economic incentive issue—and not an ethical one—is strongly suggested in the “copyright clause” of the U.S. Constitution, which grants Congress the power “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” [0]

Thomas Jefferson elaborated on his own views on IP in a letter to Isaac McPherson in 1813 [1]:

“He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody.”

To reiterate a bit of what you said, if “intellectual property” is not property at all, it cannot be stolen—only infringed upon. And the difference is important because whereas theft is a violation of natural law, infringement is a violation of the rules of a specific society.

China is a different society and it has different rules. If we want to make respecting our country’s copyrights, trademarks and patents a precondition of trade, that seems like a good idea—but we should just say that. The drama of calling it “theft” is unnecessary and wrong.

By the way, I recently read and recommend “Intellectual Property: A Very Short Introduction” [2] by Siva Vaidhyanathan for an all-around introduction to intellectual property.

[0] https://fairuse.stanford.edu/law/us-constitution/

[1] http://press-pubs.uchicago.edu/founders/documents/a1_8_8s12....

[2] https://global.oup.com/academic/product/intellectual-propert...

China also just scheduled fentanyl as a controlled substance. This is after China promised the Obama administration they’d curb the supply of the drug.

The NYTimes said that tens of thousands of Americans have died from Chinese-sourced fentanyl.

I don’t understand how American startups can take money from China, or how Google and others can work with them. They’re in a soft war with us, have a 100 year plan yet we’re all so naive.

Re: the soft war, I think perhaps the biggest threat is the disinformation campaigns being run by various worldwide entities, including the Chinese.

This is one of the best summaries I've seen about democratic governments as they contrast to 'soft' totatalitarian countries like Russia and China. This is why we all want to live in democracies.


The operational differences, for all their practical implications, may be less important than the simple recognition that Beijing and Moscow both approach influence operations and active measures as a normal way of doing business. The United States approaches covert action as something distinct from the routine business of foreign policy, requiring special authorities and oversight or legal arguments over whether Title 10 or Title 50 applies. This is simply not the case for the contemporary Chinese or Russian states. They still bear the hallmarks of their totalitarian and Leninist pasts.*

I was going to comment on The Epoch Times and China Daily (two English language papers that are tools to run influence operations), but let's leave that one for another day and just recognize that we need real, honest, truth-seeking media to have a democracy, and democracies need to figure out how to deal with our new media environment that is penetrated by disinformation.

It's very recent that there's even a fiction of oversight for US covert actions. Look at the history of Latin America.

"The strong do what they can and the weak suffer what they must" -- still true 2400 years later.

Hey, didn't the CIA fund a hell of a lot of the 20th century's abstract art movement and help push it into the artistic mainstream by deliberately purchasing loads of it to inflate prices and make it seem a lot more popular, partly because it was much more difficult to use abstract art for understandable political statements?

I generally take all non-literal war claims with head sized grains of salt along with all N-year plans. The "thousand year Reich" didn't even last twenty years. Generally when you see people swinging around nationalism and 'the new war' rhetoric they are emotionally manipulating you into doing what they want - if they had facts they would have brought them up first.

Yes the Chinese government is engaged in all sorts of shady shit and human rights violations that they deserve being criticized for but drawing Fentanyl in is a very strange link. There are many reasons to not want to do business with China from dodgy enforcement, concerns about 'extra shifts' at factories producing authentic bootlegs, technology transfers, digital security being undermined by surveillance, and not wanting to enrich unethical forms of government.

Fentanyl being treated as malice brings to mind the farcical "Mexico as a hivemind" rhetoric about Mexico" sending" drugs and criminals into the United States. Mexico didn't send jack shit - individuals did so on their own accord because it made money. That is literally treating all of them as one individual and is so ridiculously racist that it looks satirical. It would be like claiming that Americans are all crazy and suicidal because JFK was shot by Lee Harvey Oswald who was then shot by Jack Ruby.

The more likely reason is that the Party infamously only pays attention to their own problems when they start to threaten power or cause them to start lose face by being embarrassed in some way. Everywhere you'll find people willing to do shady things for a quick buck - the limit is only in what they can get away with.

I liken it to conspiracy theories: market forces can make it seem like there are single entities conspiring to do things when they are emergent forces. Happens all the time in economic markets, political stories, business stories, etc.

There is a lot of inaccurate reporting on this. Fentanyl and many analogs have been controlled substances in China for some times. However chemists keep on coming out with new variations of the chemical that are not on the list. Now China promised to put the whole category of chemicals on the list. However they will need to revise their laws to give their FDA the power to do so, and that will take some time to carry out. See also https://www.scmp.com/week-asia/geopolitics/article/2176358/f...

" or how Google and others can work with them. They’re in a soft war with us"

Google investors and staff want money and don't care about what happens in 10 years.

They are not 'us' (in your sentence, I would imagine you might be referring to Americans)

Globalization makes everything more complicated.

> I don’t understand how American startups can take money from China, or how Google and others can work with them. They’re in a soft war with us, have a 100 year plan yet we’re all so naive.

This is what happens when people stop caring about their country and only about themselves.

I might even expand beyond "country"-- we have worldwide a loose set of alliances between lots of liberal-democratic, often Western (but also including Japan, South Korea, South Africa Ukraine Poland to some extent) countries, that have a long and/or stable history of democratic governance.

"This is what happens when people stop caring about democratic governance and society, and care only about themselves."

I was born in South Korea under dictatorship. (South Korea democratized in 1987.) It makes me so happy that South Korea now "has a long and/or stable history of democratic governance".

This is largely ancillary to your point but I don't think that Washington, London, Paris, etc consider South Africa and Ukraine to be members of that club.

Americans love slavery and will justify it to themselves any way they can.

I'm a bit confused, as the Bloomberg article _hints_ at this, but then quickly moves on: is this related to the US tariffs / "Trade War" situation?

The US and China agreed to a temporary ceasefire in escalating their retaliatory tariffs, a day later they make this announcement.

Seems a bit too timely to be a coincidence, no?

It's absolutely not a coincidence as IP theft is a primary demand of the US side at this time. The other being the overall imbalance.

Ironically, the bigger one is not arbitrary theft of IP, it's the requirement of many actors to willingly give up their IP when going into China and the de-facto closed market given all of the challenges foreign entities have to face.

Some arbitrary IP theft of XMen films and fashion labels could be tolerable, as could a permanent trade imbalance as America still wins huge surpluses even in an imbalanced exchange.

If it is, I would expect that to be glossed over by Bloomberg and others.

Not that it matters much to me. I’ve been designing my embedded components in such a way that even if I turned over source code it’s not of much use to anyone. You’d need to hack my device and my AWS instances to damage more than the one board you bought from me.

China stealing previous IP from me, made me learn a lesson and get better. Not that I don’t want to see someone pay for the theft, just that I’m realistic they won’t.

Out of curiosity, how did you find out about the IP theft?

Also, what are some actions (if there are any) that one can take if one learns of such IP theft? Are there any legal protections or is it simply a lost cause at that point?

Happy to answer, found out when our single Chinese dealer contacted us saying he's able to buy 1000 of our parts of the shelf at a place he knows. Got one it, saw it's a green circuit board and not the color we use. They had lifted my code from the micro using a voltage glitch and placed it on theirs. Works great... cause it's my code.

Basically I think the rule is don't even consider legal action unless you would be happy to dump $500,000 on it. We make much more than that on my product but for a variety of reasons wouldn't go down that route.

Longer answer on prevention is that if you're making a "dumb" device today, expect no reasonable protections if your price point keeps you in a standard microcontroller range. So, if you're using anything from PIC/AVR to Cortex M7, assume you will give firmware away somehow. In our case, the next product is BLE connected and will self-authenticate via our server, we looked at PSK and PKI, and found a way to do it cost effectively because of a unique scenario that it has to mate up to the part number on another product. Basically I can just watch the database for mismatched pairs and ban them from being used. Not perfect, and someone could make one bad unit for themselves, but not thousands.

By any chance, do you deal with anything in medical space, like insulin injectors?

No, and glad that's the case. I don't need the extra hassle! I make simple niche stuff.

But, it doesn't really matter, some Chinese guys saw they could make few dollars by knocking off my PCB, making it cheaper, using cheaper components, and copying my code. It's not like it was a $40,000,000 product line.

I tell people it's how I know I'm not completely shit. That the Chinese thought it good enough to clone/steal. It's how I know I've made it.

Well, that's how it is.

Just saw that you had few posts telling that you lived in Malaysia, and thought that you may be somebody I know.

> some Chinese guys saw they could make few dollars by knocking off my PCB, making it cheaper, using cheaper components

Why not to copy their design?

>Why not to copy their design?

My dad told me, that, ‘character’ is just the things you do when no one is looking.

So how much can you have when you tell the world you are a cheat?

Obviously this is part of the negotiations going on, but, since it would reflect favorably on the current President, they'll gloss right over that. Big concessions and positive changes happening in our trade relations all over the world.

Yes, Chinese IP Theft is seen as a major problem by Trump's administration, and has been repeatedly and explicitly named as a reason to engage in tariff war.

How to reasonably hope and press for a satisfying solution to such massive state-sponsored IP theft is quite the open question.

Bloomberg is over. This site should embargo them and people shouldn't click them.

Yeah I don’t think Xi is really going to tell the PLA that they have to stop their corporate espionage/stealing American fighter plans.

If you are curious about what is actually announced, here is the original document: http://www.ndrc.gov.cn/gzdt/201812/W020181204527760656065.pd...

Thanks, very interesting.

It appears that there are no direct financial penalties, only indirectly through restrictions on government subsidies and issuing stock, as well as increased scrutiny in general and especially regarding patent applications, all mediated via the social credit system, including the much-discussed travel restrictions.

At least that's my take based on my middling understanding of Chinese.

This is mostly pertaining to administrative cases, which can be quickly resolved. I am surprised there is actually such a thing in China. These are not court cases so they don't have the same power. It seems here they are trying to enhance the power of administrative resolutions through the credit system.

You are entitled to whatever financial penalty you can get from the courts if you go through the court system, but court cases will take longer. In the US patent cases, which are highly technical in nature, can take a very long time to resolve, the upside being that very large damages could be awarded. In China it seems they aim for smaller awards (mainly injunctive relief) and quicker resolution.

> It appears that there are no direct financial penalties,

It goes with the infamous "credit system", which if you are on the watch list, you can't take first class trains nor planes, your kids can't go to schools with a loan. Damn!

What about when the Chinese country itself violates the IP rules? They can’t just punish themselves. So ironic, they will punish a few on the cover, but they will continue their old practice of steeling under the covers.

Chinese trademarks, patents and copyrights are monopolies granted by the Chinese government (note, not the US government) to rights owners and have power only within China.

Until I read about actual punishments being handed out, I'm skeptical that China will actually enforce rules on intellectual property theft.

To be fair, China is a signatory to all of the major copyright treaties of the past 60+ years.


To be fair, China is a signatory to all of the major copyright treaties of the past 60+ years.

And I clicked on "I Accept" on hundreds of EULAs. That doesn't mean I'm going to abide by the terms I "agreed" to.

Because of its manufacturing sector, China can sign onto whatever it wants and still not enforce the rules. What are the other signatories going to do? Make iPhones in Brussels?

Samsung makes its phones in Vietnam just fine. I think Apple should follow if it can.

At the very least it'll be another item to fear the government over, as things like this can be used in the future against you.

I agree with you that it won't foster a positive IP system. In China, instead, it will create more avenues for graft and retribution.

> positive IP system

No such thing exists in any country.


How can he prove something doesn't exist? You'd have to show an example it does exist. Or they'd have to list every system and show why it's not positive.

I'm not expecting a mathematical proof; just trying to understand what he means by "positive" and how he would explain the development of IP law in every successful economy. Surely no reasonable person would state an absolute like this based on _nothing_, right?

> Or they'd have to list every system and show why it's not positive.

Again, I asked for a citation, not original work. If no one has found a good IP law system (for some value of "good") then surely some economist or IP law specialist has written a paper surveying the landscape, right? If this were not the case, it would be extraordinary!

Another tool for selective enforcement

i expect foreigners to be punished for stealing china's original IP.

I'm not entirely convinced that they should

All the great western powers became so based on "stolen" intellectual property, including a great deal from China. It makes no sense for China or any other developing country to commit to such a regime until they're doing it as an equal partner.

All the great western powers became so based on "stolen" intellectual property

All the great western powers also believe that two wrongs don't make a right.

Oh, they do. Just look at the response given to terrorism: endless wars.

I suspect they will enforce a few high profile cases for meaningless products like fashion labels, and then ignore any strategically important industries citing lack of proof, or limited punishments where there is clear proof.

Trump pushing China like this is one of the better points things about his presidency (obviously opinion only). I really hope he doesn't put down his cards based on a few unlikely to be enforced points (or generally limited value) so he can tweet how he made a deal and how great he is.

Let's call intellectual property what it really is in this context: rich countries demanding that less rich countries give them money.

That fact that expropriation of wealth from countries and regions that already have less is the status quo economically, doesn't make it any less obscene or immoral.

What good is any IP law(s) if we know they won't be enforced?

The idea that China is going stop their IP theft is ridiculous.

The china-ip stuff is curious, and the conclusions (if this does conclude) are likely to be impactful for a generation.

Why would a country want to make laws that creates a type of property which they don't have as much of?

The US & Europe had been framing it as a necessary system, which China needs as much as they do. At some point, the frame changed to more of a moralistic one. This has been convincing (in the west) largely because China had no declared position. They unenthusiastically nod along but avoid enforcement.

Now, we have a more trumpish dealmaking frame. This implies that ip laws are not good for China, and that it'll take carrots or sticks to get agreement.

Me... I don't think up as it is is anywhere near optimal, from either a moral or economic dynamism perspective. Curious to see how this all works out.

> Why would a country want to make laws that creates a type of property which they don't have as much of?

Because, as you say yourself, it hopes to create that kind of property?

Well.. they definitely hope to create intellectual output. I'm not sure they need to wrap it around an IP system inspired by the western one.

Of all the issues with China, this is the one I least support a "solution" to. Adding to the arsenal of pretexts the Chinese government can selectively hold over its subject's heads.

I read the article, but I still can't work out what it's talking about. What does "Intellectual-Property Theft" mean? Are we talking about trade secrets, copyrights, or what? (Surely they can't mean patents?) Are the writers stupid, or are they deliberately trying to confuse the readers?

It is governed by World Intellectual Property Organization, which is a UN body.

hmm. China gonna play the IP game. Watch more patent trolls coming out of China.

I didn't know you could just skip this bullet point, get away with it.

Makes me wonder why we ever did it. After all, "Intellectual Property" is just a way to siphon money from my country while making our lives miserable. It's not like we ever got anything useful in the return.

Does that mean they'll revise their song pick for the official 2022 Olympic Games?[0]



I see that you, too, are a fan of Emperor Norton :https://en.wikipedia.org/wiki/Emperor_Norton


Please don't do this here.

I knew it was wrong. I couldn't help myself.

LOL, Trump is Xi’s 365-day Christmas present.

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