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As China Hacked, U.S. Businesses Turned a Blind Eye (npr.org)
330 points by derchu on Apr 12, 2019 | hide | past | web | favorite | 195 comments

Forget about the hacking.

U.S. business walked into China and handed over all of their technology and Intellectual Property, just to have it used against them by the Chinese government. China has only resorted to hacking lately in order to get more technology and IP.

And I think that’s a good thing. Intellectual Property is harmful to most and only benefits a few. If we abandoned the notion we’d be better off.

Samsung spend 130 million on research on bendable phones.

It got stolen by China. How can that be justified?


There's a few ways to justify it I imagine. One is "it saved $130M from being spent again on the same thing".

And sure there are arguments against that justification (and for it).

It's called R&D, spending too innovate is what it does.

Stealing it, is not R&D, it's theft and punishable by law.

Eg. Nintendo Wii, Xbox Kinect and PlayStation Move are the same concepts with a different approach.

Is the world a better place because of that?

What if the Kinect and Move had spent their research budget building on top of the Wii instead of reinventing it? Would the world be a better place?

(Personally, I find it baffling to see people espousing "research should be private because it yields better outcomes" on a site for an industry so deeply indebted to open source. We have empirical evidence about which approach works better, and it's not the closed private research lab one.)

Stealing and violating privacy via industrial espionage is not "open source". You're free to make your own research public, or to pay a company for full IP rights on their research and then release the results openly. But what the Chinese are doing is not the same. Even making access to their domestic market conditional on releasing proprietary IP, is in fact a hidden tariff which is not in line with free and fair trade.

Yes, I'm not claiming that violating the laws and norms is a good thing. I'm asking if the laws and norms are defensible and produce a better society. If not, then the argument needs to be "We follow unjust laws for the sake of the broader principle of the rule of law, and we work to change unjust laws so respect for law is maintained," not "These outcomes are bad."

The problem is that we're not just talking about a relatively-benign violation of things like copyrights, patents or trade secrets ("IP"): Chinese hacking is a severe violation of privacy; and their practice of forcing IP releases from foreign firms is blatantly unfair given that no reciprocity is involved, and indeed China apparently claims that they're uniquely allowed to engage in such policies because of their status as a "developing country" - itself a rather dubious claim given their reported economic performance. Privacy (and protection of physical property, in general) and fairness in trade are basic principles and far from "unjust".

Privacy of companies or of individuals? I don't think privacy of companies is a right, so that argument isn't convincing to me. (Specifically, I believe companies have no particular inherent right to existence the way people do. Companies are creations of law to serve specific goals that benefit people; we should give them whatever privileges are necessary to accomplish that, and not what's not. Privacy of certain things like customer data and things like HR conversations seems pretty clearly helpful, but mostly because that's a proxy for privacy of individuals, not because violating it would violate the company's "privacy.")

There's an easy solution to reciprocity: abandon IP protection in the US, too. My entire claim is that that would lead to a better world. If we want to not do that, we should either defend that it would lead to a worse world, or admit that we're not making arguments based on what's best for society. That's why I found the argument about "but IP protection brought us Kinect and Move" unconvincing: it's not clear at all to me that the outcome was better than in the world where the US didn't recognize IP protection.

A better world by removing IP protection or the cheapest copycat wins by removing IP protection.

I just think it has to be tweaked for preventing abuse. But it had it's advantages.

If you remove IP protection, why would a company spend millions on research on R&D to innovate something.

Look at the products that got copied from Kickstarter by China before they launched, those people really got their dream crushed.

Ps. Kinect was just an example, look for the bigger picture ;)

> Look at the products that got copied from Kickstarter by China before they launched, those people really got their dream crushed.

Ideas are cheap. These Chinese companies are supposedly taking pre-validated (via crowd funding) ideas from Kickstarter and then manufacturing them. How is this a bad thing? It introduces a desirable competition for the best ability to execute on those plans.

You obviously have not much experience creating something.

They already did more than "an idea". 3d models, marketing ( eg. Video), product iterations,..

They mostly want funds to manufacture the product, because not everyone can spend money for a MOQ manufacturing run...

What they do is unethical.

Here's some more info: https://qz.com/771727/chinas-factories-in-shenzhen-can-copy-...

1) Why would the world be a better place? What a nonsense question that has nothing to do with anything.

I said: the consumers have more options. Personally, I prefer the Kinect. So yes, I'm for diversity.

2) In a forum of "open source" people.

What does this has to do with it? I find it baffling you don't see the difference.

How do you earn your money? Work at a traditional company or did you create you own open-source product with donations?

I'd be damned if you are one of the 0,01% here that earns all his income through open-source.

I find it baffling you don't see the simple difference between software parents and IP ( without software).

Fyi. You are not earning your money through open-source. Otherwise you would know that if not the golden life either.

3) Research should be public?

Wtf? So every company should share everything?

Wtf? How realistic is that???

Answer: it's not. It's never going to happen. Stop dreaming and come back to reality please.


In a lot of the responses here, I honestly think that I have to explain it to a 12-year old. Because they don't seem to grasp reality. Or trolls, or Chinese state sponsored propaganda. I really don't understand the low quality of responses, constant Whataboutism ! Unrelated responses). That baffles me at this moment.

I believe strongly that privatization of so much we depend on is harmful. I think people are suffering because of this, making the situation urgent. I see that we can develop the technology we need all as open source. Funding is an important challenge but one I believe is possible to overcome. Look at Prusa Research and their all open source 3D printer with rave reviews. They’ve funded research, development, customer service, manufacturing, and worldwide promotional tours all with a machine that is open source. Why can’t we do that with medical equipment and computers and automobile and factory automation? In fact we could. And thus I strongly advocate that we invest great effort in this. I wish to withdraw as much as possible my support of a closed proprietary privatized system and put my daily efforts in to something open for everyone.

Privatisation and open source are 2 different things.

If you are against privatisation, great. Go to a communist country and prove it. Don't forget the 996 debacle or Jack Macs response to it.

You only want open-source? Great. Quit your job and prove me wrong that your can get an income there.

You know you won't do any of those both things. But probably you have an excuse. Great, then adjust to reality and stop believing in fairy tales. Adjust your opinion to something realistic.

Open-source takes a long road to profitability, it's not that easy. And probably, because your designs are online, some lower-cost Chinese company will take it and produce it cheaper. Except, if you have build a big community around it, it will work out for them. But the chances are really small.

Open-source always had an Enterprise/cloud option also to earn money. Currently, it's the only stable way ( donations are not a stable source of income)

Now, we are going back in circles about what was the issue...

> You only want open-source? Great. Quit your job and prove me wrong that your can get an income there.

Um, can't you also work at Red Hat or Mozilla or somewhere? Or even USDS or NASA? (Remember, OpenStack came out of a joint project between NASA and a for-profit company, and plenty of people in both organizations were paid to work on open-source full-time to make it happen....)

Red hat = IBM, so that doesn't make any sense.

Firefox is probably the only one. But they can only hire a limited amount of people and their resources depend on their market share of I'm correct.

A big part of that is the "default search engine setting" ( paid based on market share), so open-source still doesn't pay the bills at the end of the day.

My argument is still valid.

1) If you do not think the legitimate purpose of laws is to make the world a better place and nothing else, we do not agree on fundamentals, and I see you as a dangerous enemy, someone who would be a dictator or oppressor if they could. Using the government's monopoly on violence to make you happier with no concern for the rest of society is an evil thing.

Why is the legitimate purpose of laws to make you happier as a consumer?? What does that have to do with anything? (And, to the point I was originally making, why do you believe you wouldn't be even happier in the world I describe? You'd get a Kinect researched with awareness of what the Wii and Move tried and didn't, so it'd either be better or cheaper or perhaps both.)

2) Again, the legitimate purpose of government is not to preserve the way I make money, either. You're making the "Yet you participate in society!" argument. Yes, I do. The fact that I think a certain course of action is individually rational for me to preserve life and health does not mean I think the availability of that course, to the exclusion of other possible courses, is inherently good or worth preserving.

But just so you know: I maintain systems infrastructure for a hedge fund, all based on open-source software (Debian, OpenStack, Ceph, etc.). The hedge fund operates on secrecy of market data and insights but not on secrecy of fundamental research (and also making e.g. Linux available to everyone makes everyone more productive, but making our ideas about alpha available to everyone makes the alpha go away). To be clear, working at a hedge fund does not mean that I think the existence of hedge funds is inherently good or that I am opposed to societies where hedge funds don't exist, any more than working at Blockbuster means you're opposed to Netflix existing. My work is all on things that would benefit the world more if they were public and would benefit my employer no less; it's just difficult to maintain a separation between publishable work and sensitive algorithms, so I don't do as much as I'd like. But I'd like to do more, and I've quite loudly disagreed with our internal policies on this, because I think I can do better for the world and for our company if allowed to be public about everything. And my work, in any case, is keeping them running, not creating new private ideas. The public knows how to create sandwiches, and yet Subway is profitable.

And it is beyond clear that my company would be less profitable if open source software did not exist, or if we used a proprietary stack/vendor for everything.

3) Yes, it's realistic. You haven't presented an argument beyond "Nyeh, it's not," so I say, "Nyeh, is too."

> Research should be public?

> Wtf? So every company should share everything?

> Wtf? How realistic is that???

That's not what "research should be public" means. It just means that the existing institutions which the public funds for research (universities and research labs) should have their remit expanded to include "private" R&D for public benefit; and that, additionally, the public sector should routinely buy out valuable private R&D, perhaps via formally-established "prizes" - instead of merely allowing it to be monopolized via IP protection. We spend a lot of tax money already to fund private R&D by firms, that could instead be directed to fund these mechanisms.

We are talking about Samsung's research in the thread. Please don't change to subject to your liking.

Private firms are mostly subsided by government for employment, not for their research

In your world, we wouldn't have multiple terminals in *nix, cuz why wouldn't open source devs just expand on vi instead of wasting resources and time on developing emacs...

That doesn't follow - both vi and emacs have been able to be aware of each other and if necessary incorporate techniques from each other, and yet they both exist separately. At no point did I argue that we should prevent people from making two separate products if they want. I only argued that we should prevent people from keeping research and discoveries secret, and gave an example that different products could build on each other. vi and emacs have in fact had that opportunity, so this example supports my point that it's a reasonable way for the world to work. Sometimes building on each other means collaborating; something it means friendly and open competition for the sake of taking multiple approaches to a goal (which is different from competition-for-the-sake-of-competition by forcing your competitors to walk the same path you already walked, but several steps behind you).

Also, spacemacs.

I’m sure you don’t mind if I break into your house and start living there. I mean, you already spent the money there’s no need for me to spend it again on the same thing.

This is a frustrating line of argument because it ignores the entire reason that opponents of intellectual property are opponents of intellectual property: that intellectual property can be duplicated without harm to the owner. Protection of real estate or other physical property is rooted in the principle that depriving the original owner of the use of their property is unjust. "Theft" of intellectual property does not deprive the original owner of anything; it simply (perhaps) makes the potential market more competitive.

I really wish we would be able to move past these extremely basic arguments and have some discussion of the topic that isn't repeating the same thing over and over. It's fine to disagree with the duplication argument, but it's a waste of everyone's time to pretend it doesn't exist.

Duplication does harm the owner, because Samsung needs to recoup the R&D money they spent and the thief does not. Because they stole the tech, the thief can undercut Samsung on pricing, ensuring that Samsung never can be profitable enough to recoup their R&D.

There are other ways to solve that problem. One of the more straightforward ways (with precedent in US law) is a compulsory license: allow anyone to get a license to use the invention if they pay Samsung, without giving Samsung the opportunity to refuse.

Other options include collective funding of R&D (either the government-funding model, popular in the US for landing on the moon and creating the internet and taking a photo of a black hole, or the voluntary-collective model, popular in the US for creating basically all the technology we're using to have this conversation). If collective funding is more productive, this compensates the participants for R&D. And it may be subject to a prisoner's-dilemma problem, where any one entity can profitably defect even if everyone would be better off if no one did. Creating prisoner's-dilemma situation doesn't seem like a just use of the powers of government.

True, but this harm is handily offset by the benefit of an expanded use for the original tech, due to the very fact of its lower price. Critically, the more the thief is able to "undercut" e.g. Samsung on pricing, the higher this benefit. IP protection is thus more socially beneficial for tech that is expensive per se, because then there is too little "undercutting" to matter, and more like a direct transfer in value away from the creators. Folding phones are an interesting case; they obviously cannot be duplicated "costlessly", but their raw manufacturing costs are low enough that IP protection for them might still be somewhat undesirable.

That logic only applies in the case that the inventor built something for their own use, put in all the effort for their own use, and never planned on making a living off of it. The second that they invented something to profit off of/make a living off of, they are absolutely harmed when someone else copies it. I don't understand why this is even debatable.

Per the other commenter, unless you're suggesting that private property just shouldn't exist, then your argument falls apart. And if you are arguing private property shouldn't exist, I think you'll find very few takers.

This is a different argument for property than the one I was referencing. (I'm not arguing it's wrong, just that it's different.)

The argument I'm talking about is that the right to private property is the right to ownership/control. If I have X, and I am deprived of it / it is taken from me, it is unjust.

The argument you are referencing is that the right to private property is the right to exchange it at a certain value, and a negative impact on its market value is unjust. I can see some cases where this is true (e.g., buying a name-brand purse and finding it's an equally functional counterfeit), some where it's debatable (e.g., buying a house in a quiet neighborhood that gets loud), and some where it's not (e.g., buying a large quantity of a psychoactive substance that isn't controlled and then having it become controlled). So it seems like a weaker argument to me. I think you can still defend it by saying that the not-unjust cases are because there's a greater good / more important right being protected. But I also think you can just hold to the other definition of the right to private property.

In kindergartener terms: if I bring candy to school and my teacher takes it from me and eats it, that's wrong, that's stealing. If I bring candy to school with the intent to give it to other kids to boost my popularity, and the teacher tells me I can't do that and have to keep the candy in my bag, that doesn't seem like stealing.

I agree that compensating inventors is important. I disagree that treating inventions as property is the only way to do it.

>Iagree that compensating inventors is important. I disagree that treating inventions as property is the only way to do it.

So what is this magical means of Samsung being compensated for their multi-billion dollar investment that China stole that you don't think is a big deal?

As for your analogy, it's patently false that anyone involved wants the candy shared. It's been stolen.

> So what is this magical means of Samsung being compensated for their multi-billion dollar investment that China stole that you don't think is a big deal?

My claim in this thread is that not treating ideas as private property is a defensible and reasonable position to take. When you say that Samsung needs to be "compensated," you make it clear that you're not treating ideas as private property, either. The market value of property is the amount of benefit/enjoyment it provides someone else, not the amount of effort that went into making it. If I spend two hours making a cake, and you spend 30 minutes making a cake, and people want to pay both of us $10 for it, there is no violation of my property rights that I'm not compensated for spending 4x as long. You might casually say that my cake is "a steal," but the cake is definitely not being stolen from me.

If you were arguing about property rights, you would be asking about why Samsung isn't getting paid the fair market value of their ideas, not about why they aren't recouping the investment they put into creating them. (And I've even suggested elsewhere in this thread that compulsory licenses are a way to do this.)

But if you're interested in Samsung recouping their investment, well, we can discuss that but it's absolutely not property rights that are helping them do that today. If we want to discuss that, I'd simultaneously ask how to compensate people for multi-billion dollar investments that don't yield marketable products but are still good for humanity to have done the research.

> As for your analogy, it's patently false that anyone involved wants the candy shared. It's been stolen.

Not sure I follow. Samsung wants to trade phones for money. Samsung does want the phones shared: that's the entire basis of the argument The kid wants to trade candy for reputation. If you prevent Samsung from selling as many phones, no phones are being stolen. (Actually it turns out I didn't even need the analogy here.) If you prevent the kid from giving candy to classmates, no candy is being stolen. Why do you think the candy is being stolen?

> without harm to the owner

i don't quite see it.

if company A aims at the global market with a uniquely innovative product and then company B brings a copy of that product to the global market ten years later, then company A has enjoyed profitability of a unique product for ten years.

but what if company B spies on company A's process and steals copies of its designs and so brings a copy of that product to market ten months later?

isn't that depriving the original owner, company A, of some profits?

Depriving someone of potential profits isn't legally actionable harm. Otherwise we'd have to say that entering a market as a lower-cost and/or higher-quality competitor is a violation of the property rights, a theft of profit, of the existing participants.

You may or may not have a right to a fair market, and fairness may or may not include the right to secret research and development, but it's not because an unfair market harms your property rights or is "theft."

ok, but ... you originally said "harm" and now you're saying "legally actionable harm"

What sense of "harm" would it count as? If you entered a market and an existing competitor said "You harmed me, apologize," would you? If you were a doctor with an oath to "First do no harm," would you feel ethically obligated to never take business from another doctor?

I'm just thinking about profitability.

e.g. If I were a consultant to, say, Nvidia, and I told them that they were wasting valuable IT personnel time and resources by locking down and protecting their R&D documents, that all of the computers containing such info were needlessly and wastefully secure, and that, in short, there is no harm in making that info available to the public, including to Intel and AMD -- I mean, I just wonder how I would convince them.

Wouldn't they say something like "No. Releasing that info would be harmful to our bottom line, shareholders, and employees whose bonuses depend upon profitability."

If you were a consultant to the British East India Company in 1850 and told them that the world would be a better place for everyone if India were independent and not colonized by Britain, would you expect to convince them?

If you failed to convince them, would you then conclude that colonization is actually totally fine?

In particular, if someone were advocating for the independence of India in 1850, would you think the British East India Company could justifiably say "You're harming us"? (Sure, they can say it and they probably would say it, but would they have a point?)

I thought we were talking about "harm to the owner" of some IP, not making the world "a better place for everyone." A judgment or evaluation of what would be "totally fine" ethically for the whole world is a different discussion, I think.

I don't feel that the arguments you're presenting would be persuasive to the companies whose secrets are revealed. But, I may well be missing something. In any case, my takeaways from this discussion are:

1. You believe these companies don't have a solid legal case, that they cannot prove "harm" in the legal sense.

2. You believe that the system of protecting IP the US currently (in theory) embraces is sub-optimal for the well-being of the world.

Okay, fine, rephrase "without harm to the owner" as "without injustice to the owner" if that helps make my comment more understandable. I grant that there is a sense of "harm" under which deposing a dictator from his comfortable life harms the dictator, even if he isn't punished and is allowed to start a new life as a private citizen, and that's not the sense of "harm" I mean. I don't think there's a way you can argue that deposing him would be an injustice towards him.

Your logic only works if you can create digital copies of products ( products are not documents that aren't supposed to be distributed. Products are supposed to be distributed)

Eg. Product = movies

Eg. Not product = the nude selfies your girlfriend send to you.

It's not applicable to hardware and R&D. Also, it's seriously taken out of it's context to defend piracy.

You are generalizing the slang to everything, which isn't right.

This is a bad argument (as in, an argument that if followed leads to harmful conclusions) because it says the reason that redistribution of private naked selfies is bad is it harms the market value of naked selfies. It leads to all sorts of exciting nonsense like using the DMCA to stop revenge porn, and useless situations like the copyright owner of nonconsensual naked selfies being the photographer and not the subject.

Let's instead say that people have a right to control of their naked image for reasons that aren't about the property rights to the photo.

But you are wording it differently to your liking.

In the meantime, it's just the same. It's you and you have the rights to it.

It solves a problem. Your solution is weird and not generic

No, I identified two specific reasons why it's not the same: 1) in the US at least, copyright infringement is only criminal if done for financial gain (or a few other exceptions) 2) in all jurisdictions with the Berne definition of copyright, the copyright of a photo is owned by a photographer. So even if it's you, you don't have the rights to it if you didn't take the picture, and you can't pursue a copyright violation. So if your ex took a picture of you with your consent at the time, and is now spreading it on the internet, he has every right to do that, according to copyright.

Your solution doesn't solve these problems. If you want to solve these problems, you can't use copyright.

Theft removes the incentive to do r&d. If you are just going to get it stolen, others will just invest in stealing. No one will waste on r&d. There are reasons we have laws. You are making infantile arguments for pro theft with no thought to the obvious consequences. The fact that you’re getting upvoted on HN is alarming.

> If you are just going to get it stolen, others will just invest in stealing. No one will waste on r&d.

Okay, why does Linux exist? And why is it competitive with every proprietary OS kernel? And why does it get development from for-profit companies?

> There are reasons we have laws.

Of course there are. Many of those reasons are not good. In the specific realm of intellectual property law, some of those reasons are "because Disney has lobbyists".

I'm not sure this is historically supported. There's a long list of innovators who do not end up making the lion's share off of their achievements. I think innovation is just what we (humans ... or maybe even life in general?) do best and cultural values and need dictate how resources are allocated in this respect.

I would not mind if you copy my house internals and my way of life in a cheaper and more efficient manner. I would also not mind if you improve upon those designs(I would encourage you to do so). Find and Reverse Engineer my designs and improve them.

I would mind if you break into my house.

Then you should distribute the plans.

R&D documents are not distributed fyi. Totally different things.

PS. I do agree the example isn't that good, because everyone has other opinions. But then again, i don't know if your architect would appreciate it, if you give your plans to someone else.

Because he created it, not you.

That's a terribly poor analogy. If you break into my house and start living there, you occupy space and resources I could use myself, IP theft does not deprive the originator of the invention or even first mover advantage profits. It just prevents IP from being used to keep 3rd world nations there.

The U.S. did the same to Europe in the 17/18th centuries when IT need to bring itself up to par, so did Japan in the 70s/80s - so did the Europeans to the Chinese before that.

China will, (and already does to an extent), innovate and enrich the world, it just needs to catch up fast and this is the best way to do it.


IP theft would be like looking at my house and building a very similar one, or perhaps even peeking inside via the windows to note down the exact furniture. I'm not trying to say that it is a flawless way to go about it, or that anybody's 'evil', but please stop pretending that it is not a stage of every country's development at some point. Europe did it, Russia did it, the U.S. did it, Japan did it and now China does it.

Perhaps that should tell you something. In the end, this helps a country to move past sweat shops and the like faster and am certainly not going to protest too loud against that.

I absolutely don't mind you copying my house and living in that copy, which is equivalent. However, the parent asked for a justification, not for my opinion or position.

The same way any state-sponsored industrial espionage is being justified, even among supposed "friends" [0].

[0] https://en.wikipedia.org/wiki/ECHELON#Examples_of_industrial...

Almost all of the world is protected by copyright.

You mention 1 example where copyright failed ( 20 years ago...). Nothing is perfect also and it doesn't mean it's wrong to protect innovative companies.

But you lack the fundamental understanding that nothing in China has this protection. While our allies do.

Ps. Except if you count the clothes of Ivanka Trump of course, that won copyright infringement case in China.... Which was no way a political intervention to appeal to someone with the trade war happening ;)


Good rules are better than ego-interventions for the 1% every day of the year.

> But you lack the fundamental understanding that nothing in China has this protection. While our allies do.

You asked for a justification and you've answered your own question.

It happens because there are no protections for these thins in China. It is not in their culture to assign intellectual property protections in the way US culture does.

There's your justification. Their culture is different and they see yours as ridiculous and unenforceable.

China has no IP-protection because they copy and go. As soon as they would be innovators, they would adopt it.

Right now, they have a lot of luck that they are> 1 billion people and stealing everything they can without punishment.

IP-protection would happen for Chinese firms, just not outsiders. Don't change my words.

"This" protection = global protection. China just has "Chinese" protection. It's not in laid out in rules with them, but it means in 99% of the cases that they are an advantage for Chinese firms.

Ps. Blocking the market is an extreme form of IP-protection, it's even just stealing and adjusting the rules ( required Chinese partnerships). They adapted in a very bad way, they also get previous generation tech because firms don't trust it

As a result of this 'theft', consumers now have more bendable phone options.

But in the future they will see less innovation as R&D is further slashed.

I see this thrown around all the time when we talk about monopolizing IP and having huge corporations put their lawyer boots on smaller company throats... but is it really true? Will making IP protection weaker actually stifle innovation? Was innovation in industrial era hugely stuffled by not protecting every single patent a huge multi-national conglomerates throw out?

Well, yes, hence the development of patents.

"The English patent system evolved from its early medieval origins into the first modern patent system that recognised intellectual property in order to stimulate invention; this was the crucial legal foundation upon which the Industrial Revolution could emerge and flourish." ([1]Wikipedia)

Without patents what you do is create trade secrets, patents publish the concepts that are protected, they are fully disclosed (or the patent is junk) and after 25 years anyone can use them. The 25 years is the time that you have to get payback on your invention - forcing investment in development now before your monopoly expires.

[1] https://en.wikipedia.org/wiki/Patent

Yes, the biggest open source corporation is known for Enterprise solutions ( red hat).

Please find me an example that open-sourced everything, with their Enterprise solution.

They are already seeing less innovation from phone makers. Phone makers have been short on ideas for a long time now.

It didn't require any IP theft for that to happen.

It's all the same tech, what are you defending??

I would hate if this happened to the Nintendo Wii, Xbox Kinect or Playstation Move.

Which triggered HTC Vice and the Oculus adoption, later on: Hololens. ( So AR and VR)

They got so much better with actual competition and their own R&D instead of just stealing and hurting the innovator.

Us as customers got a lot more options because of competition, not because of theft.

That's so short sighted... If companies R&D is free game for competition, they will be more reluctant to innovate

Why would they be more reluctant to innovate? Couldn't it also be the opposite? For example, companies could spend more on R&D to stay ahead of the competition and lead the field instead of releasing copies of a product months or years later.

How can a company lead the field if their R&D is free for the competition to take?

Nobody ever backs up this assertion.

Right. And as a result of outsourcing all electronics manufacturing to China, US consumers now have cheaper TVs.

They've lost factories, lost jobs, lost growth momentum, but got cheap TVs.


I hate when I see this argument about lost US manufacturing. The truth is, the US industrial output has risen consistently over the years outside of recessions [0] The number of employees required to produce all of this has, however, fallen.[1] Not because of China, but because of more efficient methods of production and automation. I still don't like their IP theft though.

[0]https://fred.stlouisfed.org/series/INDPRO [1]https://fred.stlouisfed.org/series/MANEMP

>Production indexes for a few industries are derived by dividing estimated nominal output (calculated using unit production and unit values or sales) by a corresponding Fisher price index; the most notable of these fall within the high-technology grouping and include semiconductors.

You might hate the argument, but it's because the argument is accurate. The increase in US-based production isn't caused by the manufacturing industry kicking ass. It's because they fudge the numbers. They consider a CPU that's sold for twice the $ to be double the production. If you remove the high technology grouping, the US manufacturing base has cratered.

Do you have disaggregated stats that demonstrate this? Because a lot of that tech sector output isn't in the US. Sure, Intel may design their chips here, but they're manufactured internationally. Partly in the US, but also Ireland, Israel and China. So that doesn't count in favor of our industrial output index.

The full disaggregation + analysis has been linked in related discussions on HN in the past, but I don't have it. If I had to get the numbers or die, I'd search HN for manufacturing related articles from the past year.

It's quite possible that I'm just fooled by the ubiquitous "Made in China" stamp.

But another way of looking at your stats is that outsourcing labor-heavy jobs to China indeed decreases the amount of jobs available to local people. Industrial output, on the other hand, only grows because of the automation.

That's pretty much exactly what I mean. Sure, some jobs have left the country, but those no longer count in our industrial output index referenced in my parent comments. And I'd argue many of these jobs would have been eliminated with automation if they'd staying in the US anyway.

Our native industrial output has increased but via automation that actually made jobs decrease. The situation with Carrier, manufacturer of HVAC systems, is a perfect example. They were given a tax break to keep a manufacturing plant in the US, but explicitly stated they'd be investing $13 million in automation that would reduce the number of jobs needed. No other country is getting these jobs instead of the US. The jobs are simply gone, through automation.

Jobs aren't an inherent good. They're a way for people to have money, which they can in turn exchange for things they need or want, which is the inherent good. Making it harder for people to get things they need or want simply so they can have jobs risks being self-defeating, and it assumes there will never be other ways to get people access to things they need or want.

No. Job is a way of manufacturing things people need or want.

When you're well off, as a person or as a country, you can always find people or countries who will manufacture things for you.

But they will want something back. Your real estate. Your universities. Your best people.

It's a high price to pay for a bending phone.

Jobs are one way of manufacturing things people need or want. They're not the only way, unless we're playing semantic games by defining "jobs" in one sentence as "people offering 8h/day of their labor in the free market" and in the next as "people doing things"—and even if we are, let's at least be honest about the difference between "people doing things that are actually inherently productive and efficient" and "people doing things that are inefficient because we want the excuse to pay them for it." Job growth because it enables manufacturing is one thing; job growth because it enables paying people is quite another. As we become more efficient and automated in manufacturing, we'll have to decide what to do when there simply aren't enough jobs to go around. There are ways to continue giving people money to buy the things they need or want—or perhaps enable them to get the things they need or want without money—without requiring them to have jobs, or making that money proportional to the market value of their work. And they seem quite ethical.

That's why I say that jobs aren't an inherent good. They're a means to an inherently-good end. That makes them conditionally good, so long as they continue to serve the end. Prioritizing the means over the end would be a mistake.

There is no comparable alternative to giving people the things they need or want. I can think of a few (e.g., drugging people, plugging them into the Matrix) and they're unethical.


It got stolen by South Korea, how can that be justified?

South Korea charged nine people and two companies of illegally selling Samsung Electronics Co.’s bendable screen technology to a Chinese rival.

> The sale is the reward, the assignment came earlier.

Ps. South Korea was the judge, you are not reading it correctly.

What would be my incentive for fixing something if I earn no money from it?

From big companies to the lone worker, if IP is not a thing, I don't see how we can evolve technology.

I agree with the idea of not patenting software, since that is already covered by copyright, and patents were never intended to cover algorithms, however, discarding IP altogether seems like throwing the baby out with the bathwater.

Even if something is allowed to be done by everybody it doesn't mean it can be done by everybody. Just look at programming. Lack of ip(patents) shifts the power from those with patents+lawyers to those with skills (workers). Innovators, even when they are a group, are always okay because they have the skills to perform.

Copyright had been created in the first place so that people with printing presses couldn't just copy popular stuff to get a chunk of the market for some work without compensating the creator.

Lack of IP doesn't shift the power to innovators, it shifts it to the people with printing presses, with large manufacturing plants that can scale, apple music, etc etc.

IP is the very basis for compensation of innovators.

The issue is that the reach of IP is so incredibly wide.

It makes sense that if you make a comic book about a superhero named Jumpman, printing presses shouldn't be able to just 1:1 copy your product and sell it. They also shoudln't be able to use your Jumpman character in their own works.

But we have moved so far that you can copyright generic things like the very concept of a comic book. Or having a HTML image that's also a link. Or having round corners on a mobile device.

The only reason we have anything public at all is because most of these inventions happened before the dawn of oppressive IP laws.

> But we have moved so far that you can copyright generic things like the very concept of a comic book. Or having a HTML image that's also a link. Or having round corners on a mobile device.

You can't, in fact, copyright any of those things. Were they novel, the first two might be the kind of thing to qualify for utility patents, and the last is presumably a loose description of an actual Apple design patent.

> The issue is that the reach of IP is so incredibly wide.

I fully agree. Software patents for example should be abolished, and we should get shorter terms on copyright (20 years after death of creator or 80 years after publication, whatever comes sooner would be a good choice). But the very basic concept of copyright and patent law is still good for the individual creators as well as the commons. Abolishing it does not benefit the creators in general, and only shifts power away from them.

Copyright had been created in the first place so that people with printing presses couldn't just copy popular stuff to get a chunk of the market for some work without compensating the creator.

Not true. Copyright originally existed to give governments control over owners of presses in an effort to stop printing of dissenting material. It had nothing to do with compensation for authors.

And in that sense, the purpose of copyright has never changed. It is still used to decide who gets access to what information, with all the complicated licensing arrangements and insane life of author plus 70 years terms.

Not disagreeing, but hasn’t the power shifted to people with printing presses either way ?

I mean that producers are now strongly bound to distributors, and companies like Disney basically own everything from top to mostly bottom (they’re getting there with their streaming service).

In today’s world I don’t see “little guys” getting practical benefits by virtue of IP. Is there still a baby in the bath water?

Yes, as you intimate the forerunner to the Statue of Anne, the Licensing of the Press Act, was concerned with restricting who was allowed to own the means to print, and what was allowed to be printed.

But I don't think copyright amendments have been about protecting creators, or the public domain, for some time.

Yeah, both extremes "all IP is bad" and "we must patent every product even if it brings nothing new to the table" are wrong. The devil is, as in so many cases, in the detail.

True, some companies use it to troll.

But this case is exactly the reason why it should exist.

Yes, it should get tweaked a little bit though

> What would be my incentive for fixing something if I earn no money from it?

Your incentive would be that your product is better and sells more, unless and until everyone copies it. As long as the extra profit exceeds the cost invested, it's worth it.

You're claiming there would be no innovation at all unless there's IP.

How did we innovate for hundreds or thousands of years before IP laws, whether the wheel, ironmaking or any other technology?

To flip your question on its head, if IP laws prevent your innovation from reaching everyone, the benefit to society from this innovation is reduced, and that's bad.

>Your incentive would be that your product is better and sells more

I'm curious if you ever tried to sell anything in large volumes. You can invent a brilliant thing but still have hard times selling it because of a lack of resources for marketing and a lack of established sales channels. At the same time, big resourceful corporations just steal you invention and resell it to existing customer base, use huge marketing resources, benefit from brand awareness, etc.

Inventing something better doesn't automatically guarantee you a solid revenue stream. Monetizing good inventions for a small company is a way less trivial task than it might seem.

I do have experience with how hard marketing is, but big companies copying small companies' work is not the only application of IP laws. Big companies can copy other big companies' work, and small companies can copy big companies' work. Besides, many small guys — independent developers, three-person teams — don't even have the resources to patent their stuff. Which means patent laws disproportionately benefit big companies.

> Besides, many small guys — independent developers, three-person teams — don't even have the resources to patent their stuff. Which means patent laws disproportionately benefit big companies.

Are you talking about software patents?


That's already protected by copyright. I do not support software patents.

Sorry for not reading your original post carefully till now. However, I think my point still stands: if you have a product that people are paying you money for, say a camera, and you improve it, your product is more useful, and so you can charge more. Or sell more units at the same price. A camera that can record a timelapse is more useful than one that can't, whether or not other cameras record timelapses. In a world without copyright, the cost of improving your product also reduces, because you can take the code from somewhere, so it needn't sell that many extra units to recoup the lower cost.

In this way, eliminating copyright will create a race to the top, making all products better.

Intellectual Property is harmful to most

So, your fellow student will copycat your essay and essays of those around you. As a result he got the highest GPA. He got that job. You didn't.

Fair? Good for you? Good for the society?

We're talking about corporations, not humans. Do not mix the two - anthropomorphizing corporations only leads to laws that hurt society, since they are not capable of empathy.

That person gets 1-2 jobs, makes 83k/yr for the rest of their life.

The person that took the time to learn it, will grow with their knowledge.

... unless the "bad guy" keeps claiming other's people works.

Good luck with that working.

Its incredibly obvious who can produce stuff.

Putting forth some one else’s essays as your own is an issue of copyright, infringing on foldable phones is an issue of patents.

You can either continue to innovate, or copy others.

This becomes a cultural difference, and the innovators continue to be number 1.

You can copy smartly as well as innovate. That would be optimal to develop.

Always starting from scratch in your own bubble is inefficient.


Forget about industrial espionage. They're now buying the loyalty of other countries, turning them into vassal states.

EU countries aren't safe either, see Greece and Italy.

> They're now buying the loyalty of other countries, turning them into vassal states.

This isn't a new strategy. I think the main difference in perception in this case is that it's not us doing it.

"us" being "USA"?

Amongst others, yes.

They have stepped up without a concience.

Loaning money for Goodwill has always been something.

But loaning money, doing the work with your own employees, suggesting infrastructure that they can hardly afford ( and definitely not maintain), burying the country in debt is something new.

Oh yeah, in the contract ofc, they suggest what can be done if they can't pay back ofc.

= Give infrastructure, natural resources and land

>But loaning money, doing the work with your own employees, suggesting infrastructure that they can hardly afford ( and definitely not maintain), burying the country in debt is something new.

Is it? Having your own companies build infrastructure in foreign lands for your own (trade or war) benefits, and dumping the costs of build and maintenance on the region doesn't sound like a 21st century invention - it sounds like a common strategy of powerful nations.

Yes, it is. An architect works with local contractors for convenience.

China needs it's 6% growth and is hustling all other possible countries for it with the "one road, one belt" excuse

Interesting thought. Might partially explain why Germany balked at the US request for banning Huwei phones from 5G.


To Germany, it's either being spied on by the US or by China. There's no "we won't be spied on"-choice, it's only about how much they'll pay for the tech that might be used to spy on them. Banning Huawei makes no sense at all from that perspective.

One of the things completely written out of the us press record of state hacking is that way before the US was concerned about china Germany made credible accusations against the NSA for conducting industrial espionage in Germany.

And when you then remember the project Gladio revelations of the early 90ies/late 80ies and the fact that the last of America's house trained nazi's(the Gehlen organization) would have retired from west Germany influence and you get the idea that the modern German intelligence services consider some parts of the US intelligence network to have become "captured" by non-democratic interests, something the french realized doing the campaign by the OAS against DeGaule in the 60ies when DeGaule suspected that the CIA was not exactly his ally in trying to stamp out right wing coup mongers from inside the french army.

And while all of this have been published by mainstream academics and journalists it's completely left out of any narrative about America's place in the world put forward by the "mainstream"(as in approved by the establishment) American press today when discussing America's place in a post cold war mercantilist conflict against countries that are not taking orders from Washington, nor buying more from the US then they sell to the US.

The problem here is of cause if you consider American authorities to be captured by an mercantilist elite waging an commercial conflict on everyone else the way America accuse the Chinese of doing then the obvious thing is to ban American and Chinese tech from your networks as neither can be considered reliable partners and to be honest an better argument can be made that America with it's rising domestic problem and declining economy is the party more likely to pull the trigger and cause problems for the European economy by utilizing backdoors for harm, then for China doing the same from a position of economic growth.

They figured out if you just pay the decision makers some money they will sell everyone out. See congress for examples.

No. They figured if you present the decision makers with a way to massively increase their profits, they would happily trade long term advantages for short term gains.

Your comment is so flippant it's useless. Can you explain how China has bribed our politicians?

I fee like it’s sort of turnabout is fair play given how much technology the colonial powers stole from China.

I am unable to identify any technology which was stolen by any colonial power from China.

Nuclear reactors? Machine guns? Bombs? Steam engines? Cannons?

Gunpowder "Theft" dates back to the 14th century. I think everyone will agree that this is realllllly stretching it.

Paper money was invented by the Chinese first, but AFAIK historians have consensus that when the Italians adopted paper money later on, they had the idea independently from the Chinese.

The secret of porcelain making was guarded well by the Chinese, eventually Saxons (or the British, it's disputed who was first) figured it out without their help.

Not exactly technology theft, but one example which comes to my mind is illegal clinical drug trial on population in developing countries like China and India. It still benefits Western/colonial powers (drug companies). Not that it makes the hacking ethical but still somewhat 'fair'.

Bombs and Cannons were both Chinese inventions.

Patents expire in under 20 years, and on apply in the country of issue, I think we're safe in terms of international treaty obligations.

China signed up to the Berne Convention of 1886 on copyright in 1992, three years after USA implemented it.

Berne gives a minimum term of 50 years (loosely speaking) and covers all signatory countries.

Perhaps they shouldn't have signed, or sought to reduce the copyright term?

> Hickton opened an investigation and quickly set his sights on a special unit of the Chinese military — a secretive group known as Unit 61398. Investigators were able to watch as the unit's officers, sitting in an office building in Shanghai, broke into the computer systems of American companies at night, stopped for an hour break at China's lunchtime and then continued in the Chinese afternoon.

> ...

> But when Hickton went to the companies, eager for them to become plaintiffs, he ran into a problem. None of the companies wanted any part of it. Hickton says they had too much money on the line in China.

There really ought to be a law that mandates that 1) companies disclose any and all hacking incidents/data breaches they become aware of and 2) co-operate with the government in the investigation of those breaches.

Though I'm a little confused why they would need the "the companies to become plaintiffs." Wouldn't hacking be a criminal matter that's would be directly prosecuted by the government? Did they want to go against the hackers both criminally and civilly?

> Wouldn't hacking be a criminal matter that's would be directly prosecuted by the government? Did they want to go against the hackers both criminally and civilly?

The Justice System in the US is ultimately centered around the Jury. To prove criminality, you need to convince the Jury that a crime was committed. And they are much more likely to empathize and agree with the prosecutors if they have a large number of American companies agreeing with the prosecutors that the Chinese entities stole from them.

Why is it that intelligence agencies are still conducting their activities during their countries working hours?

You'd figure it would be easier to find nocturnal neckbeards anyways.

In this case, the timezones probably line up to make Chinese working hours the best time to do this work.

Seems like a dangerous precedent. Someone could move to China and hack US companies and get away with it.

> unfair business practices originating from China are costing the American economy more than $57 billion a year, White House officials believe

And yet the companies who supposedly lose that money don't care.

It reminds me a little of the $200-250B "lost" to piracy by the movie and music industry (http://freakonomics.com/2012/01/12/how-much-do-music-and-mov...). To be more precise it reminds me of how everyone likes to create large impressive numbers that prove their point or support their agenda.

I suspect the amount is a mix of things:

* Investment in IP that then gets stolen. * Loss of potential earnings as American companies are locked out of Chinese markets * Loss of actual earnings as American/global consumers switch to Chinese companies (eg huawei) that are accused of unfair business practices or receiving unfair government subsidies.

Some companies “don’t care” because they aren’t actually losing money, they’re just not making as much as they could be.

But other companies are ‘coerced’ into not caring because what happens if they complain? They lose Chinese government contracts. They effectively admit to shareholders that their IP has been stolen and lost. They waste time and resources fighting unwinnable legal battles against Chinese national champions (ie. the Chinese state).

I’ve met plenty of small/medium sized business owners who are so sickened by their experiences with China and the Chinese market that they’re happy to just ignore it all and save themselves the heartache.

If you count being locked out of the Chinese markets, I think the number is actually much, much larger than $50B. But that seems to be rather unrelated to hacking? In fact most countries openly or secretly try to lock out foreign owned businesses. If the point is that China does it more than others, perhaps it's true, but it's a lot more complex issue than outright hacking.

I think the hacking and being cut out of domestic markets is fairly closely linked.

If you’ve already stolen the IP, you don’t need to let the foreign business in to provide that service.

Possibly even more widespread though has been the standard practice over the last 20 years of lettin foreign businesses setup shop in China, hacking/stealing all their tech, then the state uses its legal/political resources to make life horrendously difficult for the original foreign business.


Here's the similarity.

I do think US companies suffer from hacking, just like the music and video industry suffer losses from piracy. I think, however, that the numbers reported are exaggerated beyond belief.

Piracy losses are exaggerated because if you take away free music and movies, most pirates will not pay anyway anywhere close to the amounts they are said to "steal" from the copyright owners.

Hacking losses are exaggerated because the supposed trade secrets are often just a PR gimmick. I've seen all too often how corporate lawyers and executives claim their special unique tech is worth billions, when in fact it's worth very little if anything.

As to whether US companies can do something: sure they can; the whole point of the article is that they care a lot less than one would expect.

Hey my bad for obnoxious comments on my part, it's true that people overvalue IP sometimes in the West. Part of the reason for the reason for China's entrepreneurial success is the fact people borrow ideas from others to move faster.


If you're having a bad day, other commenters on HN are not the best place to take out your frustrations. Let's all be nice to each other here.

The big deal for me is that the content creators aren't getting paid, the anti industry narrative of ip should be free campaigners ignores this.

The government sponsored professional hacking team that was mentioned in the article was the focus of the infamous APT1 report by Mandiant (now FireEye), with investigations from 2006 and later: https://www.fireeye.com/content/dam/fireeye-www/services/pdf...

There have been many APT groups named and tracked since then, not just in China.

Oh, memento. Those events fit the climate described in the article.

> Intrusion Truth's controversial approach of anonymously unmasking government-backed hackers and exposing a foreign intelligence agency is something new and seen as a method to put pressure on Chinese companies cooperating with state-sponsored hacking efforts.

https://www.zerohedge.com/news/2018-10-04/intrusion-truth-my... - https://motherboard.vice.com/en_us/article/wjka84/intrusion-... - https://twitter.com/intrusion_truth - https://intrusiontruth.wordpress.com

Also even naming the group APT which was a corporate buzzword at the time (for advanced persistent threat aka anything above script kiddies and aimless bots).

APT is anything that happens to you.

APT still kinda is a buzzword. It appears in my Cisco cybersecurity courses all the time.

USGOV and all but the largest businesses don't mesh. The solution to the spying threat is extending tort liability and statutory damages to negligence when there are compromises. Not different than product safety, liability will make quick work of the problem.

Who's the plaintiff in your suggestion? The article is not about companies leaking Americans' private data to China (though I'm sure that happens too), it's about them turning a blind eye when their own company confidential technology and product designs are stolen by China. For tort liability to be a factor here, the company would have to initiate a lawsuit against itself, which would never happen.

The type of industrial espionage described in the article is actually a form of temporal arbitrage - it's present shareholders stealing from future shareholders and then hoping to unload the shares before the consequences of their decisions are reaped. In order to get access to the lucrative Chinese market now (and goose this quarter's earnings), they put up with Chinese industrial espionage that results in reduced competitiveness 10 years down the road. In 10 years, they probably won't be working at the company, nor will they hold many shares, and so the consequences don't affect them personally.

This is a big problem in general (not just with industrial espionage - short-termism also affects labor practices, financial health, social fabric, environmental pollution, and global warming), but it's hard to see how any legal solution would fix it. Future shareholders are generally not entitled to sue until they actually become shareholders, at which point everybody says "Well, you should've known how fucked up the company was when you bought the shares". Similarly, unborn children don't get a vote on societal policies that may destroy the earth or society they live in before they're born. Usually the best alternative is just to deal with the problem with band-aids in the future, once it becomes widely recognized as a problem.

> In order to get access to the lucrative Chinese market now (and goose this quarter's earnings), they put up with Chinese industrial espionage that results in reduced competitiveness 10 years down the road.

Alternate reality: they stay alive instead of being hammered in earnings by their competitors, invest increased earnings to get better at security and prevent future data exfiltrations, use their existing corpus of innovation to get even more competitive and continue to exist long into the future.

Innovations are important and must be protected. But the short-sightedness of today is partially driven by a change in reality: the rate of technological advances is brutally fast.

Agreed. There is just zero reason to care about it and that lack of care only diminishes as more and more companies are compromised so it becomes normal and consumers really have no choice to take their business elsewhere.

The only way this will change is if there are financial and/or criminal penalties for gross neglect of private data. I think healthcare (HIPAA) is another good example, although the financial penalties need to be higher given some of the compromises and relatively small fines.

Thank you, I’ve been saying this forever.

The solution to widespread hacking isn’t to make it easier for one side to find the other guys malware (quicker) while compromising your data privacy, in exchange for help from gov. Which is basically the only NSA “defence” being offered to businesses via “information sharing” programs.

No, it’s providing a framework to do advanced manufacturing in China. Every western company knows that the Chinese partners are stealing their tech. But stopping that will hurt the next quarter.

"When I pressed them on why they were not taking stronger action against China, their response was, 'We have a multifaceted relationship with China.' "

And this is it: don't want to upset the promise future sales. And this is how 'dividing and conquering' works. One side speaks with 'one voice', the other with 'thousands of little voices' - and it's game.

And the one company highlighted in the article as speaking out is on the verge of being broken up by Western governments. The western world is being played like a fiddle.

Negotiating power is everything, and western democracies and their private and corporate citizens have absolutely none compared to autocratic regimes.

That one company has also completely reversed its stance over the last year and now openly defends censoring human rights and complying with the CCP's surveillance demands.

Google has no reason to hold its head high.

Why is Google singled out for reprobation when, as the article points out, they've spoken out more than other companies?

Sure, no one is spotless, but as it stands it's Microsoft that runs a censored search engine (Bing in China) and Apple that handed over its Chinese users iCloud encryption keys.

To be fair, you could say Apple and Microsoft had their reasons for doing so (as people including the Chinese themselves have argued). But why all the focus on Google then? Is the idea of a Chinese search engine (which has since been cancelled) worse than actually running a censored search engine such as Bing China?

It's gotten to the point where people commonly think Google is cozier with Chinese authorities than other companies, when if anything it's the opposite. That seems perverse.

I completely agree with the argument that Google is no worse -- and have publicly campaigned to this effect -- but I was responding to the claim that Google should be proud of its history of standing up against authoritarian pressure. It no longer deserves that honor.

But, yes, Microsoft and Apple are equally, if not more, deserving of shame.

what makes me laugh about Google's expression of frustration in this matter is that Google extracts/copies info from other websites, summarizes it and displays it directly to the user in their search result page!

The whole idea behind the western world at the moment is to have as little in common as possible. No government, no taxes and especially no regulation is the dream. So why would the average citizen care?

Weren’t people saying this shit wrt the USSR during the Cold War?

And this is it: don't want to upset the promise future sales.

Uh, it's even simpler. China is now the only place that a variety of things get manufactured (injection molded plastic in bulk only happens in China, for a significant example. Books in various formats, etc). If you decide to fight China, you can no longer get your X made. For a smallish manufacturing company, that would put you out of business. China sales is just an extra consideration.

That's generally not the kind of leverage that China has. Factories bend over backwards for your business, 'we won't make it for you' is not a kind of discussion that's had. There are almost always alternatives and they know it.

The stick/carrot that China uses is market access.

The thing is, there is often no actual carrot. Zuck has been on his knees forever, as have Google, they are nowhere.

If you're Pizza Hut or KFC or some kind of brand, maybe, but anything else ...

I'm sure an individual Chinese factory wouldn't take reprisals on it's own or anything.

This is speculative - as much for anyone doing business with China as for me in the US just thinking. But it's not individual factories doing the hacking and I assume it wouldn't be individual factories doing the reprisals, it would be the Chinese state, which has a reputation for a scorched earth approach.

And yeah, given the carrot often isn't very real, the idea that provokes unanimous behavior among US companies in China seems implausible.

Why do you assume that individual Chinese companies dont do any hacking and that the only companies being hacked by Chinese entities are "Western".

In a lot of ways China is a lot like the US doing the gilded age when companies were at each other throats and no trick was to dirty in the game of markets.

There is this decease in US strategic thinking of looking for an superhuman single conspiracy whenever the cartel of "no longer strong enough" conspirators the author/thinker backs or belong to is not 110% successful where as the reality is often far more chaotic where you have a series of competitors(who is competing with each other and you) essentially changing the market dynamics in a way that makes the market hostile to some organizations.

The other problem is that if capitalism works as described China should be growing and the west declining as capital are supposed to flow towards stable developing(as in still poor) states as that's where the biggest payouts is, the fact that the reverse is true for America(and for the global cold war economy) proves that Smith was either wrong or that America was never a capitalist democracy.

The cold hard truth is that the next wave of growth will likely bypass the west so unless you want to become a low margin(de facto state controlled) monopoly or is small enough to ignore interstate markets you need to be in China, India and in decade or two Africa to grow, and the Koreans and Chinese have already gone there so if you are an western company you are catching up from a position of weakness.

FYI, I don't assume that Chinese companies don't do hacking. It's just that the article was about hacking by the Chinese state and why American companies have been reluctant to come forward as victims of this hacking.

And this question in a sense has little to do with China in particular. When someone is victimized by an individual or institution that has considerable power over them, are they reluctant to come forward? You bet they are. The only thing that can convince them is an individual or institution that can protect them.

The US government cannot protect a US company doing business in China. Is this something like an "abusive relationship", sure but so are a lot of things.

If I recall correctly, a concerted effort to step up these industrial espionage activities began around 2008. Many American companies never publicly acked or fessed up to being hacked either out of embarrassment or “multifaceted” reasons.

In some cases I think the executives don't want be involved in an investigation out of fear that the Chinese got kompromat on them. You know, guy on a business trip, making new friends among certain enthusiastic locals...

Do you really believe that’s the only reason companies dont want to participate in an investigation?

When stocks take a dive and customers flee and the public calls for rolling heads every time there’s a compromise?

How is it ok to lay the blame squarely and fully on the shoulders of the victims here?

“Honey or condensed milk with your bread?” he was so excited that he said, “Both,” and then, so as not to seem greedy, he added, “but don’t bother about the bread, please.”

(c) Winnie the Pooh

I remember iRobot was quite popular few years ago here in Europe, today everybody buys much cheaper Chinese devices. Same about smartphones: Apple/Samsung->Huawei. Same about Quadrocopters. It looks like it's just a matter of time until CPUs, GPUs, FPGAs, E-vehicles will be designed/produced by Chinese companies.

Look, you can really protect your intellectual property in Europe and in USA, but you cannot do that in the rest of the world. It means your innovations will be copied and much cheaper products will be created. You can protect your own internal national market, but you cannot compete on all the remaining world markets. So what to do? End of intellectual property? Back to trade secrets? Even this will probably not help in long term.

China hacked. Because it seems they are better at their job than their counterparts in the U.S. - saw first hand their capability. Small cubicles, 3 sq yd, 30 in a row, all with different language skills, ( any language ), Computer science graduates from the No 1 University in China. Pay is a fraction of what a compatible grad is being paid in the U.S. No competition. High pay won't make the leverage.

I saw Mr. Hickton speak a few nights ago. It was really an interesting talk about some of the challenges for the future: https://www.youtube.com/watch?v=8Zktw-m5hTI

It's super weird how everybody considered Trump odd for his hate for China, yet these days so many people just repeat the, usually completely baseless, anti-China FUD.

Whether it's Huawei supposedly spying on everybody or the Chinese government putting implants on Super Micro boards, nothing is too absurd to be spread by, out of all parties, Five eyes themselves.

Does China hack? Of course, so does the US, it even steals IP from allies. But I seriously doubt the damages for that go into the $57 billion, that's just a piracy-damages like inflated number. In reality, a whole lot of interesting innovation, particularly on the hardware level, has already been happening in China for years already. They gonna out-make the US maker movement, on a massive scale [0].

[0] https://youtu.be/SGJ5cZnoodY

There is plenty of truth to much of the china situation, not just FUD. While the Potus has bounced between 'i love china' and 'we need to do something about these people', the rampant IP theft negatively affects nearly everyone on HN.

> There is plenty of truth to much of the china situation, not just FUD.

Yet FUD is all we get and people eat it up like the best thing ever.

Even here on HN barely anybody questioned the Super Micro narrative, even tho that Bloomberg story was super sketchy from the very beginning by not disclosing who did that audit, just like their inability to produce a sample of the chip.

Trump also never "bounced" on China, China is pretty much the only thing he doesn't bounce on, it's been his one constant since the election [0] and just because he throws an "I love China" in there, does not reflect or change any of his policy decisions. This is much more "I love my enemies because they are so stupid" posturing [1] than an declaration of actual sympathies.

[0] https://www.youtube.com/watch?v=RDrfE9I8_hs

[1] https://abcnews.go.com/Politics/10-times-trump-attacked-chin...

Did we forget that he basically soured the relationship with a trade war of escalating tarifs? If you punch someone in the face and they punch back and then say “see I told you”... I guess you are a prophet.

I think the root cause is because of China has no human-rights.


Maybe so, but please don't post unsubstantive comments here.


Kind of a weird example because: 1) that's not hacking 2) all that proves is that his professional network of friends/ex-colleague/former collaborators was stronger than the rest of the company's?

So the guy at the other start knew how to do what you guys didn't? That makes this relevant to cyber-espionage how?

?? Put what together? I don’t get it..

They were just making ends meet.

Fiber ends


Or... you could say it’s nearly impossible to protect against dedicated nation states, particularly against all major US businesses. If Google can get hacked, then what hope does a vacuum cleaner maker have?

That's a good question. Where is the vacuum manufactured? Many have lots of parts manufactured in China. If they're not pretty sophisticated about this outsourcing, they're giving away the store before any hacking even starts.

Maybe there are some vacuums manufactured in USA that have BOM with only generic components from China. That's a good start, but if they just have every technical document dumped in sharepoint then there could still be problems.

If you're actually talking about vacuum cleaner marketers rather than manufacturers, I don't know what to tell you. Disintermediation is. I have more sympathy for middlemen than any consumer has, but that's not much.

Not really the point the GP was making. Doesn't matter where you manufacture, that's only one attack vector.

This is a defeatist attitude, not to mention a bit incoherent. One moment we're meant to despise them because they can't independently invent or manufacture anything. The next moment we're supposed to fear them because they are gods of hacking from which no commercial secret may be hidden or protected. Which is it?

Actually, there are various techniques by which IP may be protected. It is work, though. Fix your shit.

How is this any different to the NSA and Chinese companies?

We already know the NSA did this to Huawei for multiple years.

One could make the case that Chinese businesses and governments have a tighter relationship where the fruits of such hacking could be used to benefit businesses. While the NSA/other US gov agencies may be hacking chinese companies, I have yet to see any indication that it is done for the purposes of IP theft and/or anything is being shared with US businesses.


In 1999, Enercon, a German company and leading manufacturer of wind energy equipment, developed a breakthrough generator for wind turbines. After applying for a US patent, it had learned that Kenetech, an American rival, had submitted an almost identical patent application shortly before. By the statement of a former NSA employee, it was later discovered that the NSA had secretly intercepted and monitored Enercon's data communications and conference calls and passed information regarding the new generator to Kenetech.[69] As German intelligence services are forbidden from engaging in industrial or economic espionage, German companies are frequently complaining that this leaves them defenceless against industrial espionage from the United States. According to Wolfgang Hoffmann, a former manager at Bayer, German intelligence services are aware which companies are being targeted by US intelligence agencies, but refuse to inform the companies involved.[70]

"[Checking] whether European companies were breaking trade embargos" is not the same as government-assisted industrial espionage.

The EU claims information obtained by the US government was fed to amongst others Boeing and McDonnel Douglas.

And what about Albanian spies?!?

There and plenty threads about the NSA's, CIA's etc malfeasance.

I humbly submit that this one is about China's.

where can we learn more about this?

Because Chinese companies don’t have anything that wasn’t stolen from western countries.

Oh and NSA doesn’t pass stolen information to private companies. That’s what China does.

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