23 ms·

How Chinese Officials Hijacked My Company

329 points by ilamont 6y ago

warmcat 6y ago
Should we really be surprised at this?
- krak12 6y ago
  Upvote, before Chinese downvote to death this post
corty 6y ago
The article gives several possible ways to improve the situation. However, one critical way is missing imho: China forces foreign investment to always come in the form of a joint venture with a Chinese company. This practice needs to be forbidden or heavily penalized in all future trade agreements and similar international contracts.
- jacquesm 6y ago
  Forbidding that practice will simply mean that you won't be doing any more business in China. Which is fine with me. It's just that CEOs that see a virgin population of over a billion consumers for their widgets can't help themselves and will agree to just about anything to be able to tap that market before their competition does.
  - dkdk8283 6y ago
    I support reducing trade with china. The need for cheap goods comes with a long tail price tag. It needs to be discussed more. Many Chinese workers are in severe poverty and strengthening Chinese businesses seems to only fuel inequality.
    - valuearb 6y ago
      Free trade with China has vastly improved Chinese workers living standards. Those rural jobs from the Cultural Revolution were actual poverty, and physically dangerous to boot.
      - funviolence 6y ago
        who cares? not our problem.
      - skolsuper 6y ago
        There are democracies we could have enriched instead, rather than supporting an authoritarian regime
    - Wolfenstein98k 6y ago
      I agree with you that we need to be much more careful and rigorous before trading with China, but China's market-based growth since Xiaoping's reforms are the reason hundreds of millions of Chinese citizens are out of poverty now. It is the new turn to geopolitical hegemony and debt entrapment that we should be careful of, not the incredible influx of wealth that has (wonderfully!) gone to the Chinese lower classes. Free trade, and the US leading the world charge to open up to China, is the best thing that happened to Chinese citizens. Things are different now that the state has such an iron grip, and its own intentions, however.
  - close04 6y ago
    This is the shortsightedness of chasing short term profits for the investors rather than a more sustainable approach of not handing over the reins to a less than trustworthy partner. I'm genuinely curious for how many companies did this short term bump in profits outweigh the long term loss by irretrievably handing over technology, business strategies, etc. Edit for the comment below. > legally obliged to maximise shareholder value Fiduciary duties are not so explicitly described. A CEO must use care and be diligent when making decisions on behalf of the company and shareholders. Make choices in good faith with true belief that each choice is made with the best interests of the corporation in mind. Hence the best interests of the corporation must be weighed between short term and long term. A CEO could argue either way that they took the decision in good faith. This is where my curiosity came from, how many of these decisions turned out to be financially successful in hindsight?
    - secondcoming 6y ago
      Aren't CEO's kind of legally obliged to maximise shareholder value, so they have to do the deal with the devil?
      - tbihl 6y ago
        No. They are to act in the best interest of the corporation/shareholders, which with increasing clarity means not getting in bed with Chinese organizations (assuming your foresight extends beyond the end of your nose.)
        secondcoming 6y ago
        hindsight is great!
      - jacquesm 6y ago
        Why do we see this thing over-and-over-and-over again? It isn't true. It never was. Stop repeating it.
        6y ago
  - secondcoming 6y ago
    The agreement needs to be reciprocal. China should have to jump through the same hoops if it wants to do business in the US, UK, Australia, etc And not just for doing business either, things like home ownership too. If I cannot buy a house in China (not that I'd want to pay for a Chinese house that'll last 5 years max) because I'm not Chinese then they should not be allowed buy in my country either. Vancouver, Toronto, Sydney... all have property markets destroyed by Chinese funny money. It has to stop, but it won't due to greed. Trump is right about China (I'm not American, don't live or work in America, and have never, or could ever, vote in an American election. Take your faux outrage elsewhere)
    - michaelcampbell 6y ago
      > The agreement needs to be reciprocal. China should have to jump through the same hoops if it wants to do business in the US, UK, Australia, etc Then deal with the woke cries of xenophobia.
      - SpicyLemonZest 6y ago
        Disapproval of China is strong across the political spectrum.
    - true_religion 6y ago
      I don’t think people’s outrage about political topics is fake. If I came out I strong support the Uyghurs re-education camps, would those outraged by that be faking it simply because I have zero influence in the CCP?
    - beaunative 6y ago
      this is not a issue with Chinese buyers, this is a issue with existing land owner, who would do everything to imcrease sell price. Don't say somehow it's the buyers fault. Foreign buyers don't vote in election. it's the vote and money of property owners that allowed those purchase of land with no real purpose other than investment.
      - 6y ago
  - gruez 6y ago
    >It's just that CEOs that see a virgin population of over a billion consumers for their widgets can't help themselves and will agree to just about anything to be able to tap that market before their competition does. Isn't that the point of forbidding it? You can't enter the market, but neither can your competitor, so there's no FOMO.
  - goatinaboat 6y ago
    It's just that CEOs that see a virgin population of over a billion consumers for their widgets can't help themselves and will agree to just about anything to be able to tap that market before their competition does. Every CEO must realise by now that they will never get to tap that market, they will hand over their IP, they will carry the cost of establishing the product or service in the country, and then be booted out with nothing. Then a few years later a heavily capitalised Chinese company will show up and start competing with them with their own IP in their home country. It's heads China wins, tails the West loses. While our political class buries their heads in the sand, or worse, colludes in return for scoring points against domestic opponents.
- murgindrag 6y ago
  Or reciprocated. Chinese citizens have invested a ton in US businesses, which is sort of okay. They also bought a ton of land in the US, which led to skyrocketing housing prices, and in the long term, if it continues unabated, will lead to the US paying tribute to China in the form of rents on US land. There is no upside to this. We got cheap Chinese plastic trinkets. They got our real estate. Didn't we do this to the indigenous people here once ourselves? To be clear: I'm not opposed to being able to buy foreign land per se, but I am opposed to how one-sided this is. For the most part, US entities can't really own real estate in China (and even with Chinese entities, it's complex, but that's another story).
  - Wolfenstein98k 6y ago
    Here in Australia, it's a giant issue too. There are plenty of houses which are Chinese-owned but unoccupied. They are effectively "banks" for storing cash. The scale is shocking, our "foreign ownership" figures for real estate are entirely skewed to this one country.
    - fuzxi 6y ago
      It's the same in Canada, too.
    - six2seven 6y ago
      Similarly in Spain. In large cities like Madrid or Barcelona these guys are owning properties, running both small and large businesses and very often avoiding taxes (try to ask in one of small venues for a bill and be sure then to check it). Moreover, quite some properties are Chinese-owned winding up the rental prices for local population, which were already pumped up by popularity of short-term holiday rentals such as AirBnB. These have been pretty well known problems to local population, but nobody up is doing anything about it, since it is an easy and quick money.
    - tgsovlerkhgsel 6y ago
      I believe Switzerland has a relatively elegant solution for this: You get taxed on the expected rental income if the house is empty unless you can prove that you couldn't rent it out.
- chrchang523 6y ago
  Flip the script: we may want this sort of thing to be happening more, not less, on a global scale. When we want to help developing countries, this is one of the most effective ways to do so. We should just be smart and restrict this to more-values-aligned, more-development-left-to-do countries like India, Rwanda, etc.
- specialist 6y ago
  I just learned that Tesla in China does not have a local partner. Which surprised me. Was Tesla an exception? Are there others? Regardless, I'm absolutely certain that China is exfiltrating every morsel of IP. As state policy. It's what they do. The only interesting wrinkle to me is that Elon Musk is probably okay with the knowledge transfer. A man on a mission. Whatever it takes to get humanity carbon neutral asap. -- I'm fine with developing economies doing their thing. The notion was to nurture the BRICS countries, allow them to mature, not crush them in their cribs. No one can argue today that China remains a developing economy. We're past time for realpolitik.
  - generatorguy 6y ago
    Tesla is probably ok since the car is a platform auto updated over the air if China steals the design and can build the exact physical machine and even a version of the firmware it will soon be an inferior version of the product without updates. Kind of like how android phones that don’t get updated are inferior to those that do.
  - yorwba 6y ago
    Wholly Foreign-Owned Enterprises (WFOEs) are not an uncommon way for foreign companies to operate in China, and Tesla is definitely not an exception. According to data from the Chinese ministry of commerce, WFOEs accounted for about 74% of all import/export by companies with foreign investment in the first half of 2020 http://project.mofcom.gov.cn/1800000121_33_13497_0_7.html http://project.mofcom.gov.cn/1800000121_33_13497_0_7.html
    - coupdejarnac 6y ago
      If that's true, I find that extremely surprising.
  - ReallyFantastic 6y ago
    China ended its JV rule for the auto industry in April 2018: https://www.nytimes.com/2018/04/17/business/china-auto-electric-cars-joint-venture.html https://www.nytimes.com/2018/04/17/business/china-auto-elect... Tesla was the first auto company to take advantage of this exception, some have argued that this exception was specifically carved out to incentivize them to build the Shanghai Gigafactory
- contingencies 6y ago
  China forces foreign investment to always come in the form of a joint venture No. This is not just plain wrong, it is normally not the case. See WFOE comment.
- xmly 6y ago
  Only certain protective industries require that to get some licenses. Apple, Tesla and numerous other US companies are 100% foreign entity in China. For hybrid, the usual cases are that they want to get government subsidies or special tax incentives.
- xmly 6y ago
  Also, most of famous China companies, such as Baidu, Alibaba, Tencent and etc are also controlled by a foreign shell companies as well.
  - 5m17h 6y ago
    What do you mean?I don't understand
sercankd 6y ago
Article is behind paywall, is there alternative link?
- throwayws 6y ago
  It seems they activate the paywall after a post gets traction. Because there was none before.
  - deleted 6y ago
    [deleted]
  - croutonwagon 6y ago
    Easy bypass is to run it through a url shortener, and then outline.com. Works for NYT as well, and most others.
    - dwd 6y ago
      NYT can be bypassed using Reader View, but the WSJ seems to be able to disable it.
      - croutonwagon 6y ago
        Sometimes. I find it can be hit and miss. Depending on how many articles ive read....er loaded. Outline trick works for a lot. Even sites like financial times etc
    - greenyoda 6y ago
      Thanks, I tried this with tinyurl.com, and it worked! The NYT paywall (and many others) can also be bypassed by blocking cookies and/or JavaScript using a browser extension such as uMatrix. (That doesn't work for WSJ, however.)
  - dependenttypes 6y ago
    I knew that they were scummy but this is quite extreme. Thankfully it is easy to bypass with archive.org (or archive.is)
hummel 6y ago
It seems that Mr. Saleen has suffered the same fate that my electric car company suffered in 2010. After promising us a partnership, his only intention was to obtain the technology and the secrets, at that time one of the few complete EV powertrains on the market. As soon as the contracts were signed and the technology was evaluated, two separate companies were set up based on the same technology.I have to say that the valuation of these companies now exceeds 8 billion dollars, while my project died because it did not receive the agreed investment. I will not tire of repeating this for the rest of my life. We foreigners are the enemy of the Chinese. We will never, ever, ever be seen as equal partners. They will never respect Western standards. They will never have elegance or deference in the treatment of business. We have no guanxi, we are not to be trusted and they will always seek their advantage over us. I'm not saying it's bad, I'm just saying we should understand this to deal with them. Hopefully Trump is highlighting the problem and I hope that the European Union will do the same very soon. A final example is how they have multiplied the price of masks during the COVID-19 period and have speculated, set up fraudulent companies and taken advantage of the misfortune they themselves have generated. Solidarity is not in their vocabulary, least of all with a foreigner. Now all of you Chinese from HN can downvote me.
- RhysU 6y ago
  Have any references on this story?
- secondcoming 6y ago
  This is sad but true. There are some very interesting channels on youtube made by westerners who live in, or used to, China e.g. Serpentza. Some of them are quite eye-opening, especially more recent ones from when the CCP decided having foreigners in China is a bad thing. The videos from years ago were quite positive, but honest, generally about China. Not any more.
  - fxtentacle 6y ago
    That sounds very interesting. Do you have some links to videos, both old an new, to illustrate the trend?
nsoonhui 6y ago
Not really off tangent: I won't be surprised if this attracts lots of comments along the lines "US/ WESTERN COUNTRIES did this before too and therefore no better than China". I just can't understand why when it comes to geopolitics, HN just can't keep the discussion related to the submission? Somehow US/ western countries have to enter the discussion as a bad benchmark...
- OwlsParlay 6y ago
  I do find it funny how HN used to really bemoan the strict IP laws of the US, especially when it comes to software or medicine.... but if it's China getting around those laws then boo them.
  - dccoolgai 6y ago
    Strong arming a high school kid for pointing out an obvious security flaw is a little different than "disappearing" millions of uighur people. You probably aren't even allowed to read that.
- rayuela 6y ago
  Nationalism, Identity Politics, and don't forget the paid shills. It's the same problems you see in any large public online forum. I think addressing this issue is actually something for a very interesting discussion.
- mattmanser 6y ago
  No-one has yet, but what's the problem with it? America stole Britain's intellectual property for a leg up a century or two ago, now a different country is doing it to them. It's just the normal cycle, and America have long had a lot of artificial legal protections in place to try and stop it and limit the rest of the world's prosperity. The harsh copyright laws and IP agreements they've bullied the rest of the world into accepting are beginning to fail, and these sort of articles are a direct consequence of that, why wouldn't we discuss it? It's an intellectually interesting effect. There's also the other question of is it really stealing? America still has the knowledge, after all. Copyright laws were supposed to encourage innovation, but as many here have argued, have gone too far, what's the surprise now a country has enough power to say No to America, they're saying No.
NicoJuicy 6y ago
There's only one way out and ( to my opinion) it's redirecting resources to support "Made in India 2025"
- deleted 6y ago
  [deleted]
- fermienrico 6y ago
  Indian manufacturing is notoriously bad for the same reasons. So many Indian companies will backstab foreigners. They make fun of their gullibility, “firangis” and there is so much local callousness in India against foreigners.
  - NicoJuicy 6y ago
    The problem is coming up with a solution. India > China and also has a billion civilians. They are nowhere near that abusive as China. And are more western minded. What's your best workable solution then?
Wolfenstein98k 6y ago
The scale of their IP theft is incredible. The CFO survey said it is happening to 1 in 5 US corporations, which is incredible if you think about it - but the trouble is the scale is larger than that, when you include what they steal via surveillance too. I can't see an answer outside of decoupling, seeing as they're set on their path and proud of it. https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-stole-their-ip-within-the-last-year-cnbc.html https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-s...
- matz1 6y ago
  >I can't see an answer outside of decoupling Maybe stop relying on IP as your business strategy ? Always be innovating so that you always be one step ahead those who copying.
  - rbecker 6y ago
    In this context, IP includes trade secrets, industry know-how, and human expertise. Strip away the IP, and only inventory and manual labor is left.
    - zozbot234 6y ago
      > IP includes trade secrets, industry know-how, and human expertise These are the hardest kinds of IP to reproduce or "steal", though. I can believe that direct infringement of formal IP rights might be an issue, but this sort of more 'tacit' knowledge is a different ballpark.
      - true_religion 6y ago
        Trade secrets and human expertise are incredibly easy to steal, but in the US at least trade secrets are protected by law unless explicitly disclosed to the public and human expertise is constrained by non compete agreements. On the other hand, for a country, any company operating within its boarders using is ripe for exploitation. Unless a foreign company uses 100% foreign workers, and eschews all government inspections, then the knowledge is already exposed to your citizens. With the way CCP policy is, if a trade secret is exposed to anyone on China, it’s effectively lost completely since the government can directly disclose it to who ever they wish.
quoyn 6y ago
Reading the title and the url my first thought literally: "What? someone from Wall Street Journal admitted they are bought and paid by the Chinese?" Not joking here WSJ has admitted, after a lot of pressure, to receive money from China Daily it's just not very well known.
balola 6y ago
It seems he fell into a classic trap, the Chinese partner never intended to make cars, as the only product they ever produced is a Smart-like "mini-four-wheel-car", which was itself stolen from an HK student design. So the plan is quite apparent, the Chinese partner just wanted his reputation and brand recognition, in exchange for promised access to the China market, to leverage huge land quota (state controlled lucrative resource, highly coveted) and bank/government loans. It never planed to make any real cars, it's just a capital play to game and profit off of the system, like pennies for grands.
- zhikanbumai 6y ago
  Relevant news coverage in Chinese: https://translate.google.com/translate?sl=auto&tl=en&u=https://tech.sina.com.cn/it/2020-08-06/doc-iivhuipn7067803.shtml https://translate.google.com/translate?sl=auto&tl=en&u=https...
  - runnerup 6y ago
    Thank you, this was an excellent read for myself, an English-speaking American. It's interesting how much of a big story this is locally for that city. Are Chinese news stories often this long and detailed? Is it extra newsworthy because Saleen / "Sailin" vehicle manufacturing was part of that province's five year plan? Or would this have gotten the same coverage regardless?
    - baybal2 6y ago
      The story enough fishy to look like a scam even by Chinese standards. 1. Doing business in China? Do it without govt. involvement. The less you see those guys the better. 2. Never do any joint ventures. Never deal with stocks, and public companies. 3. See a well wisher popping up on your doorstep with a business proposal? Turn the guy around, he is a scam. 4. Don't be public about your business, be as obscure as possible. Operate on online platforms. Have disposable shell company structures. 5. Don't ever get sued, and this is why you keep shell companies. Chinese legal system is almost as "sticky" as American one, if not more. Once the legal "casus belli" is established, and the court takes on the case, the plaintiff can keep suing you for all eternity.
worlddan 6y ago
Managed to find below article on a bit of searching. Seems like 2019 was still good year for Saleen? https://jalopnik.com/you-re-not-gonna-believe-the-crazy-shit-at-saleen-s-chi-1836675160 https://jalopnik.com/you-re-not-gonna-believe-the-crazy-shit...
de6u99er 6y ago
Reminds me of the TransRapid story. https://www.dw.com/en/china-masters-german-train-technology-will-cut-costs/a-1982476 https://www.dw.com/en/china-masters-german-train-technology-...
- AlbertoGP 6y ago
  Well, they did promise to cut costs to 1/3 of the German version, but they didn’t actually build it: “Originally planned to be ready for Expo 2010, the controversial project was repeatedly delayed, with final approval being granted on August 18, 2008.” “[...] In March 2009, the project was reported to be "suspended", although it had not been officially cancelled. The October 26, 2010 opening of the Shanghai–Hangzhou high-speed railway makes construction of this line unlikely.” https://en.wikipedia.org/wiki/Shanghai%E2%80%93Hangzhou_maglev_line https://en.wikipedia.org/wiki/Shanghai%E2%80%93Hangzhou_magl... But they keep promising it: Title: “China's 600 km/h high-speed maglev prototype completes successful trial run” Reading further: “The prototype didn't run at 600 km/h, but at a much lower speed as an operational debugging test.” And then: “According to CRRC, by the end of 2020, five high-speed maglev test vehicles will be rolled off the production line. Besides, a whole engineering system of the 600 km/h high-speed maglev prototype will be completed, which signifies China will master a whole set of the technology and engineering capability by that time.” “[...] China aims to put a 500-km-long high-speed maglev line into commercial use by 2025.” “[...] Using German technology, the Shanghai maglev line is a demonstration line. Since then, China has been striving to develop its independent technology in the field, where Japan and Germany have been taking leading positions.” “Step by step, the country is making solid progress. Analysts say that the successful test on Sunday signifies that China has achieved the same level as Japan.” https://news.cgtn.com/news/2020-06-21/China-s-600-km-h-high-speed-maglev-completes-trial-run-RvueeEECTm/index.html https://news.cgtn.com/news/2020-06-21/China-s-600-km-h-high-...
  - redis_mlc 6y ago
    I was on the Shanghai-Pudong maglev train last year. They accelerate to 300 kph. It uses German technology based on 1920's era patents. It doesn't use superconductors. All the foreign passengers took selfies with the lead car in the background. :) There's an excellent maglev museum at the Shanghai terminal. The "maglev" rail stores yard is half-way along the route. AMA.
alloai 6y ago
There are two sides of the story, there is a Chinese version saying that there are a lots of frauds here. Car making is a capital burning business, you just can not do it without the wealth like elon musk. It's kind of a venture investment here, there were so many car investment in the past few years, when there were investment bubbles, but now, the bubble is gone.
- magicsmoke 6y ago
  I've read in a paper somewhere that a big part of why Chinese auto manufacturers aren't as successful as Japanese or Korean ones is because they're too tied to the local government to fail. Each province in China has their own local auto company connected to the provincial government, resulting in a lot of duplicated effort and inefficiency. Japan and Korea had a lot of indigenous auto makers when they first started as well, but they allowed the weaker ones to get bought out and cannibalized to build up the stronger ones.
  - deleted 6y ago
    [deleted]
  - xenospn 6y ago
    Japan has a very long tradition of quality and striving for perfection. China, not so much. And cars these days really need to be more than “good enough” to compete worldwide.
    - freddie_mercury 6y ago
      Japan's worldwide reputation was "garbage, low-quality stuff" until the 1960s. That's not a "very long tradition". "At first, Japan had a widely held reputation for shoddy exports, and their goods were shunned by international markets" For a pop-culture example look at the Back To The Future movie where the 1955 version of Dr. Brown says "No wonder this circuit failed. It says 'Made in Japan'." The 1985 version of Marty says "What do you mean, Doc? All the best stuff is made in Japan."
Ericson2314 6y ago
Honestly I don't have much problem with protectionism. Flagrant theft is no good, but when the companies enter in the domestic partnership the IP transfer is rather more de jure. And if China didn't take any IP they would continue to be massively under-developed and just a source of cheap labor, be cause there's no way in hell US companies would have willingly fostered higher skills, higher pay there. Let's face it, major US companies that outsource to China are doing fine, at least compared to workers, and we shouldn't start fucking WW III to raise their profits further. What's far more concerning to me is what is described in https://phenomenalworld.org/reviews/trade-wars https://phenomenalworld.org/reviews/trade-wars, the general race-to-the-bottom export dynamics where every country surpresses wages to try to stay competitive, and via the paradox of thrift not enough consumption has been afforded. This will ruin us. And we see the race to the bottom politically too, which follows. That book says bilateral tarries are a farce because commerce can route around them. As a programmer that makes....goddamn sense. They instead recommend general capital controls, which cannot be routed around. That also makes sense. How about we fix our rotten economy, reinvigorate society, and win a cultural war rather than loose a real one?
- unishark 6y ago
  > And if China didn't take any IP they would continue to be massively under-developed and just a source of cheap labor, be cause there's no way in hell US companies would have willingly fostered higher skills, higher pay there. We sell the training for those skills to anyone willing to pay as part of a huge education industry. You can just buy the textbooks on amazon or get many of them along with any other materials for free. Smaller countries in the west who couldn't possibly stand up the the big "bully" economies, and less developed regions like the US south, all have developed right up the cutting-edge with everyone else. They became developed by simply playing the game according to the rules. The real problem with developing countries is the ability tofollow those rules. The culture isn't fully-formed yet and some people are unclear on the line between stealing/scamming versus legitimate business. That doesn't mean stealing and scamming are a necessary part of development. It's the corruption that holds it back. Economic growth is based on people taking risks and making deals, which needs security and trust between them.
0-_-0 6y ago
What's up with the mass downvoting in this thread? I've never seen this before on HN.
neonate 6y ago
https://archive.is/oLIJl https://archive.is/oLIJl
Angeo34 6y ago
If China does it to the US it's bad and newsworthy but the fact that Germany is the most spied country worldwide by the US for industrial espionage this seems like hypocrisy at best which is what the US is known for anyway. At least China is consistent.
beaunative 6y ago
This happen to be a well-reported news on the Chinese internet where I was able to find more details. And the author's own claims are dubious and sketchy. It was never a three way deal, he may have deals with a Chinese company that owns share. That maybe why he said it's a threeway deal, but it's two two-way deals. He never made any deal with Chinese officials, but another Chinese business owner who made the deal with the government. The fact he didn't say is that the company was in debt and bankrupted, whose employees are still trying to get paid for their work. Another claim he make is that the local government did fulfill their monetary investment. The author said the money that the local government gave was not 'nearly enough', which is impossibly large tax-payer money, to build streamlined car production, but both parties agree to the deal in the beginning, it was the expectation. And the investor would of course, expect the invested to deliver the said product with said investment, which, as the author said, didn't happen. What's more. There is an whisleblower within the company who work in the accounting department shared with the public on open internet months ago that the non-investing shareholders of the company who didn't put in any money, instead intellectual properties, take mortgage out of their shares, which would be unacceptable in most investment scenario because unless the patents are sold, it's outright stealing from the investing shareholder who put in actual money especially so when the final product weren't made and sold. The accountant told the public that those patents are bought with 2.2 million US dollar but were valued as 100 million, and 'technologies' that were included in the valuation are yet to be perfected, that can't be used in production. This rant piece is nothing more than a shameful attempt to exploit American sentiment on Chinese 'property theft' trying to sway an on-going court judgement to the author's private financial interest. If there are any wrong-doings should be left with the court to decide, but there are enough ground for an investigation to be launched, or at least, for the investor to be angry. If the author actually ran an successful operation, I would feel sorry for him, the evaluation issues won't be a problem, but that simply wasn't the case. It is a catastrophic waste of public money for a failed venture of the author and his partners. I can not attest to if the author is making those claims unaware of those problems that he himself is also cheated by the other party, which is the Chinese company who mortgaged their shares and actually owns the patents. That company bought the company the author originally founded in the US, leading the private Chinese companies to own the author's patents. I'd say the Chinese government is the fool in this scenario.
FpUser 6y ago
Personally I no longer support the concept of IP. Reason being that if it was enforced to the letter nobody except largest corps can't make a single thing now without breaking some patent and sued to the oblivion. As for software patents, this is just cherry on a cake of insult. I bet there is not a single software product out there that does not break some patent.
11thEarlOfMar 6y ago
The US is in withdrawal from 4 decades of policy that intended to bring China out of the 3rd world and into the first. The motivation was to reduce the threat of nuclear war and at the same time, create a major new market for trade. Those positive intentions did not foresee what China would actually become, and even if US administrations all along could have foreseen it, they may have persisted, believing that reducing nuclear threat was worthwhile, even with the current adversarial outcome. The line that got crossed that I don't believe anyone anticipated was the genocide of entire ethnic and religious populations. Those horrors have a moral weight that counterbalances the threat of nuclear war. We have no choice but to completely decouple, and what's more, may still find ourselves in the shooting war we were trying to evade.
naringas 6y ago
intellectual property is conceptually corrupt. at the very least we should be honest and admit that it's all about being continuously paid for things we already finished doing (sometimes even generations ago). but I am pretty sure that it will have to get worse, far worse, so bad that a Kafka seems tame before people get convinced that ownership over language is stupid.
- TazeTSchnitzel 6y ago
  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
- deleted 6y ago
  [deleted]
- jonahbenton 6y ago
  The other way to look at it is to recognize that it is hard to invent and prove the value of something, but easy to copy and pollute once that is done. We are all familiar with unfortunate examples of this. And yes, copyright extension, yadda yadda, but no one is being forced to enjoy, for instance, Mickey Mouse. That they do, and it endures and retains value- why is the creator not entitled to protect it as an asset for as long as people value it? And regarding the Kafka reference, the story of his stories is itself enlightening on this subject. We only have them, and the utility of the reference, through the protective actions of his friend. Were there no Intellectual Property, they would have been burned after his death. Cheers.
  - chillacy 6y ago
    > why is the creator not entitled to protect it as an asset for as long as people value it? That masks the fact that IP laws are a form of regulatory capture. The original deal was to gain exclusive ownership _for a limited time_ at the cost of disclosure and understanding that it would eventually enter the public domain. Fun fact, before trademark laws were enforced, baggage makers like Louis Vuitton just increased the quality of their stitching / logograms in order to differentiate themselves. In fact the modern LV prints are a result of this process of trying to make his goods too expensive to counterfeit. Now luxury brands can stamp on inferior quality materials and sell just as well. There's no competitive force to increase quality anymore, these brands can just put their logos on decent-but-not-top-end materials.
cnl2020 6y ago
Is IP theft in China a problem? Yes "I would bring experience, design, engineering and related technologies developed over my 40-year career in the automotive industry building race cars and high-performance street cars. My contributions to the deal were valued at $800 million" Yeah. Sure. And then the ferry tale starts... (I live in China and work with some VC guys) " the joint venture applied for 510 Chinese patents for my designs, technologies, trade secrets and engineering developments. Most of the patent filings didn’t even list me as the inventor. " Yeh. Sure. I may believe this number since patents applied for/issued it is a metric for Chinese companies based on government requirements. 1 Person? 500 Patents? be assured that most of it are bullshit patents.
jkhdigital 6y ago
For some reason, after reading this article and a bunch of the comments here, I'm reminded of two quotes from two of my favorite authors: "Standards of living far below what we would consider to be poverty have been the norm for untold thousands of years. It is not the origins of poverty which need to be explained, since the human species began in poverty. What requires explaining are the things that created and sustained higher standards of living." from Wealth, Poverty and Politics by Thomas Sowell "Modernity needs to understand that being rich and becoming rich are not mathematically, personally, socially, and ethically the same thing." from The Bed of Procrustes: Philosophical and Practical Aphorisms by Nassim Nicholas Taleb
oger 6y ago
The real question here is: Is it getting better? For example Alibaba is putting a lot of effort into combating fraud (I.e. fake products) on its platform. The Chinese government also made serious moves. Does IP theft exist and is it serious? For sure. Is it getting better? Probably yes. Does being in an election year help to have realistic reporting on this issue? Probably not. And BTW have a look at how Japan grew in the 60s and 70s.
spectre8 6y ago
China only recognizes patents applied for and granted by the China patent system. I believe you engaged a Chinese company to handle the JV. I worked in China 8 years. The amount of obfuscation and outright theft is beyond comprehension.
a0-prw 6y ago
20% ? I'm disappointed. I would have hoped that a nation as smart as China could be more effective than that.
bergstromm466 6y ago
"How can politicians look into TV cameras and say we have a free market system when patents guarantee monopoly incomes for twenty years, preventing anyone from competing? How can they claim there are free markets when copyright rules give a guaranteed income for seventy years after a person’s death? How can they claim free markets exist when one person or company is given a subsidy and not others, or when they sell off the commons that belong to all of us, at a discount, to a favoured individual or company, or when Uber, TaskRabbit and their ilk act as unregulated labour brokers, profiting from the labour of others?" - Professor Guy Standing also: 1. The current political economy is based on a false idea of material abundance. We call it pseudo-abundance. It is based on a commitment to permanent growth, the infinite accumulation of capital and debt-driven dynamics through compound interest. This is unsustainable, of course, because infinite growth is logically and physically impossible in any physically constrained, finite system. 2. The current political economy is based on a false idea of “immaterial scarcity.” It believes that an exaggerated set of intellectual property monopolies—for copyrights, trademarks and patents—should restrain the sharing of scientific, social and economic innovations. Hence the system discourages human cooperation, excludes many people from benefiting from innovation and slows the collective learning of humanity. In an age of grave global challenges, the political economy keeps many practical alternatives sequestered behind private firewalls or unfunded if they cannot generate adequate profits." - By Michel Bauwens, Franco Iacomella

329 points by ilamont 6y ago

warmcat 6y ago

Should we really be surprised at this?

krak12 6y ago
Upvote, before Chinese downvote to death this post

corty 6y ago

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

jacquesm 6y ago
Forbidding that practice will simply mean that you won't be doing any more business in China. Which is fine with me. It's just that CEOs that see a virgin population of over a billion consumers for their widgets can't help themselves and will agree to just about anything to be able to tap that market before their competition does.
- dkdk8283 6y ago
  I support reducing trade with china. The need for cheap goods comes with a long tail price tag. It needs to be discussed more. Many Chinese workers are in severe poverty and strengthening Chinese businesses seems to only fuel inequality.
  - valuearb 6y ago
    Free trade with China has vastly improved Chinese workers living standards. Those rural jobs from the Cultural Revolution were actual poverty, and physically dangerous to boot.
    - funviolence 6y ago
      who cares? not our problem.
    - skolsuper 6y ago
      There are democracies we could have enriched instead, rather than supporting an authoritarian regime
  - Wolfenstein98k 6y ago
    I agree with you that we need to be much more careful and rigorous before trading with China, but China's market-based growth since Xiaoping's reforms are the reason hundreds of millions of Chinese citizens are out of poverty now. It is the new turn to geopolitical hegemony and debt entrapment that we should be careful of, not the incredible influx of wealth that has (wonderfully!) gone to the Chinese lower classes. Free trade, and the US leading the world charge to open up to China, is the best thing that happened to Chinese citizens. Things are different now that the state has such an iron grip, and its own intentions, however.
- close04 6y ago
  This is the shortsightedness of chasing short term profits for the investors rather than a more sustainable approach of not handing over the reins to a less than trustworthy partner. I'm genuinely curious for how many companies did this short term bump in profits outweigh the long term loss by irretrievably handing over technology, business strategies, etc. Edit for the comment below. > legally obliged to maximise shareholder value Fiduciary duties are not so explicitly described. A CEO must use care and be diligent when making decisions on behalf of the company and shareholders. Make choices in good faith with true belief that each choice is made with the best interests of the corporation in mind. Hence the best interests of the corporation must be weighed between short term and long term. A CEO could argue either way that they took the decision in good faith. This is where my curiosity came from, how many of these decisions turned out to be financially successful in hindsight?
  - secondcoming 6y ago
    Aren't CEO's kind of legally obliged to maximise shareholder value, so they have to do the deal with the devil?
    - tbihl 6y ago
      No. They are to act in the best interest of the corporation/shareholders, which with increasing clarity means not getting in bed with Chinese organizations (assuming your foresight extends beyond the end of your nose.)
      - secondcoming 6y ago
        hindsight is great!
    - jacquesm 6y ago
      Why do we see this thing over-and-over-and-over again? It isn't true. It never was. Stop repeating it.
      - 6y ago
- secondcoming 6y ago
  The agreement needs to be reciprocal. China should have to jump through the same hoops if it wants to do business in the US, UK, Australia, etc And not just for doing business either, things like home ownership too. If I cannot buy a house in China (not that I'd want to pay for a Chinese house that'll last 5 years max) because I'm not Chinese then they should not be allowed buy in my country either. Vancouver, Toronto, Sydney... all have property markets destroyed by Chinese funny money. It has to stop, but it won't due to greed. Trump is right about China (I'm not American, don't live or work in America, and have never, or could ever, vote in an American election. Take your faux outrage elsewhere)
  - michaelcampbell 6y ago
    > The agreement needs to be reciprocal. China should have to jump through the same hoops if it wants to do business in the US, UK, Australia, etc Then deal with the woke cries of xenophobia.
    - SpicyLemonZest 6y ago
      Disapproval of China is strong across the political spectrum.
  - true_religion 6y ago
    I don’t think people’s outrage about political topics is fake. If I came out I strong support the Uyghurs re-education camps, would those outraged by that be faking it simply because I have zero influence in the CCP?
  - beaunative 6y ago
    this is not a issue with Chinese buyers, this is a issue with existing land owner, who would do everything to imcrease sell price. Don't say somehow it's the buyers fault. Foreign buyers don't vote in election. it's the vote and money of property owners that allowed those purchase of land with no real purpose other than investment.
    - 6y ago
- gruez 6y ago
  >It's just that CEOs that see a virgin population of over a billion consumers for their widgets can't help themselves and will agree to just about anything to be able to tap that market before their competition does. Isn't that the point of forbidding it? You can't enter the market, but neither can your competitor, so there's no FOMO.
- goatinaboat 6y ago
  It's just that CEOs that see a virgin population of over a billion consumers for their widgets can't help themselves and will agree to just about anything to be able to tap that market before their competition does. Every CEO must realise by now that they will never get to tap that market, they will hand over their IP, they will carry the cost of establishing the product or service in the country, and then be booted out with nothing. Then a few years later a heavily capitalised Chinese company will show up and start competing with them with their own IP in their home country. It's heads China wins, tails the West loses. While our political class buries their heads in the sand, or worse, colludes in return for scoring points against domestic opponents.
murgindrag 6y ago
Or reciprocated. Chinese citizens have invested a ton in US businesses, which is sort of okay. They also bought a ton of land in the US, which led to skyrocketing housing prices, and in the long term, if it continues unabated, will lead to the US paying tribute to China in the form of rents on US land. There is no upside to this. We got cheap Chinese plastic trinkets. They got our real estate. Didn't we do this to the indigenous people here once ourselves? To be clear: I'm not opposed to being able to buy foreign land per se, but I am opposed to how one-sided this is. For the most part, US entities can't really own real estate in China (and even with Chinese entities, it's complex, but that's another story).
- Wolfenstein98k 6y ago
  Here in Australia, it's a giant issue too. There are plenty of houses which are Chinese-owned but unoccupied. They are effectively "banks" for storing cash. The scale is shocking, our "foreign ownership" figures for real estate are entirely skewed to this one country.
  - fuzxi 6y ago
    It's the same in Canada, too.
  - six2seven 6y ago
    Similarly in Spain. In large cities like Madrid or Barcelona these guys are owning properties, running both small and large businesses and very often avoiding taxes (try to ask in one of small venues for a bill and be sure then to check it). Moreover, quite some properties are Chinese-owned winding up the rental prices for local population, which were already pumped up by popularity of short-term holiday rentals such as AirBnB. These have been pretty well known problems to local population, but nobody up is doing anything about it, since it is an easy and quick money.
  - tgsovlerkhgsel 6y ago
    I believe Switzerland has a relatively elegant solution for this: You get taxed on the expected rental income if the house is empty unless you can prove that you couldn't rent it out.
chrchang523 6y ago
Flip the script: we may want this sort of thing to be happening more, not less, on a global scale. When we want to help developing countries, this is one of the most effective ways to do so. We should just be smart and restrict this to more-values-aligned, more-development-left-to-do countries like India, Rwanda, etc.
specialist 6y ago
I just learned that Tesla in China does not have a local partner. Which surprised me. Was Tesla an exception? Are there others? Regardless, I'm absolutely certain that China is exfiltrating every morsel of IP. As state policy. It's what they do. The only interesting wrinkle to me is that Elon Musk is probably okay with the knowledge transfer. A man on a mission. Whatever it takes to get humanity carbon neutral asap. -- I'm fine with developing economies doing their thing. The notion was to nurture the BRICS countries, allow them to mature, not crush them in their cribs. No one can argue today that China remains a developing economy. We're past time for realpolitik.
- generatorguy 6y ago
  Tesla is probably ok since the car is a platform auto updated over the air if China steals the design and can build the exact physical machine and even a version of the firmware it will soon be an inferior version of the product without updates. Kind of like how android phones that don’t get updated are inferior to those that do.
- yorwba 6y ago
  Wholly Foreign-Owned Enterprises (WFOEs) are not an uncommon way for foreign companies to operate in China, and Tesla is definitely not an exception. According to data from the Chinese ministry of commerce, WFOEs accounted for about 74% of all import/export by companies with foreign investment in the first half of 2020 http://project.mofcom.gov.cn/1800000121_33_13497_0_7.html http://project.mofcom.gov.cn/1800000121_33_13497_0_7.html
  - coupdejarnac 6y ago
    If that's true, I find that extremely surprising.
- ReallyFantastic 6y ago
  China ended its JV rule for the auto industry in April 2018: https://www.nytimes.com/2018/04/17/business/china-auto-electric-cars-joint-venture.html https://www.nytimes.com/2018/04/17/business/china-auto-elect... Tesla was the first auto company to take advantage of this exception, some have argued that this exception was specifically carved out to incentivize them to build the Shanghai Gigafactory
contingencies 6y ago
China forces foreign investment to always come in the form of a joint venture No. This is not just plain wrong, it is normally not the case. See WFOE comment.
xmly 6y ago
Only certain protective industries require that to get some licenses. Apple, Tesla and numerous other US companies are 100% foreign entity in China. For hybrid, the usual cases are that they want to get government subsidies or special tax incentives.
xmly 6y ago
Also, most of famous China companies, such as Baidu, Alibaba, Tencent and etc are also controlled by a foreign shell companies as well.
- 5m17h 6y ago
  What do you mean?I don't understand

sercankd 6y ago

Article is behind paywall, is there alternative link?

throwayws 6y ago
It seems they activate the paywall after a post gets traction. Because there was none before.
- deleted 6y ago
  [deleted]
- croutonwagon 6y ago
  Easy bypass is to run it through a url shortener, and then outline.com. Works for NYT as well, and most others.
  - dwd 6y ago
    NYT can be bypassed using Reader View, but the WSJ seems to be able to disable it.
    - croutonwagon 6y ago
      Sometimes. I find it can be hit and miss. Depending on how many articles ive read....er loaded. Outline trick works for a lot. Even sites like financial times etc
  - greenyoda 6y ago
    Thanks, I tried this with tinyurl.com, and it worked! The NYT paywall (and many others) can also be bypassed by blocking cookies and/or JavaScript using a browser extension such as uMatrix. (That doesn't work for WSJ, however.)
- dependenttypes 6y ago
  I knew that they were scummy but this is quite extreme. Thankfully it is easy to bypass with archive.org (or archive.is)

hummel 6y ago

It seems that Mr. Saleen has suffered the same fate that my electric car company suffered in 2010. After promising us a partnership, his only intention was to obtain the technology and the secrets, at that time one of the few complete EV powertrains on the market. As soon as the contracts were signed and the technology was evaluated, two separate companies were set up based on the same technology.I have to say that the valuation of these companies now exceeds 8 billion dollars, while my project died because it did not receive the agreed investment. I will not tire of repeating this for the rest of my life. We foreigners are the enemy of the Chinese. We will never, ever, ever be seen as equal partners. They will never respect Western standards. They will never have elegance or deference in the treatment of business. We have no guanxi, we are not to be trusted and they will always seek their advantage over us. I'm not saying it's bad, I'm just saying we should understand this to deal with them. Hopefully Trump is highlighting the problem and I hope that the European Union will do the same very soon. A final example is how they have multiplied the price of masks during the COVID-19 period and have speculated, set up fraudulent companies and taken advantage of the misfortune they themselves have generated. Solidarity is not in their vocabulary, least of all with a foreigner. Now all of you Chinese from HN can downvote me.

RhysU 6y ago
Have any references on this story?
secondcoming 6y ago
This is sad but true. There are some very interesting channels on youtube made by westerners who live in, or used to, China e.g. Serpentza. Some of them are quite eye-opening, especially more recent ones from when the CCP decided having foreigners in China is a bad thing. The videos from years ago were quite positive, but honest, generally about China. Not any more.
- fxtentacle 6y ago
  That sounds very interesting. Do you have some links to videos, both old an new, to illustrate the trend?

nsoonhui 6y ago

Not really off tangent: I won't be surprised if this attracts lots of comments along the lines "US/ WESTERN COUNTRIES did this before too and therefore no better than China". I just can't understand why when it comes to geopolitics, HN just can't keep the discussion related to the submission? Somehow US/ western countries have to enter the discussion as a bad benchmark...

OwlsParlay 6y ago
I do find it funny how HN used to really bemoan the strict IP laws of the US, especially when it comes to software or medicine.... but if it's China getting around those laws then boo them.
- dccoolgai 6y ago
  Strong arming a high school kid for pointing out an obvious security flaw is a little different than "disappearing" millions of uighur people. You probably aren't even allowed to read that.
rayuela 6y ago
Nationalism, Identity Politics, and don't forget the paid shills. It's the same problems you see in any large public online forum. I think addressing this issue is actually something for a very interesting discussion.
mattmanser 6y ago
No-one has yet, but what's the problem with it? America stole Britain's intellectual property for a leg up a century or two ago, now a different country is doing it to them. It's just the normal cycle, and America have long had a lot of artificial legal protections in place to try and stop it and limit the rest of the world's prosperity. The harsh copyright laws and IP agreements they've bullied the rest of the world into accepting are beginning to fail, and these sort of articles are a direct consequence of that, why wouldn't we discuss it? It's an intellectually interesting effect. There's also the other question of is it really stealing? America still has the knowledge, after all. Copyright laws were supposed to encourage innovation, but as many here have argued, have gone too far, what's the surprise now a country has enough power to say No to America, they're saying No.

NicoJuicy 6y ago

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

deleted 6y ago
[deleted]
fermienrico 6y ago
Indian manufacturing is notoriously bad for the same reasons. So many Indian companies will backstab foreigners. They make fun of their gullibility, “firangis” and there is so much local callousness in India against foreigners.
- NicoJuicy 6y ago
  The problem is coming up with a solution. India > China and also has a billion civilians. They are nowhere near that abusive as China. And are more western minded. What's your best workable solution then?

Wolfenstein98k 6y ago

The scale of their IP theft is incredible. The CFO survey said it is happening to 1 in 5 US corporations, which is incredible if you think about it - but the trouble is the scale is larger than that, when you include what they steal via surveillance too. I can't see an answer outside of decoupling, seeing as they're set on their path and proud of it. https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-stole-their-ip-within-the-last-year-cnbc.html https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-s...

matz1 6y ago
>I can't see an answer outside of decoupling Maybe stop relying on IP as your business strategy ? Always be innovating so that you always be one step ahead those who copying.
- rbecker 6y ago
  In this context, IP includes trade secrets, industry know-how, and human expertise. Strip away the IP, and only inventory and manual labor is left.
  - zozbot234 6y ago
    > IP includes trade secrets, industry know-how, and human expertise These are the hardest kinds of IP to reproduce or "steal", though. I can believe that direct infringement of formal IP rights might be an issue, but this sort of more 'tacit' knowledge is a different ballpark.
    - true_religion 6y ago
      Trade secrets and human expertise are incredibly easy to steal, but in the US at least trade secrets are protected by law unless explicitly disclosed to the public and human expertise is constrained by non compete agreements. On the other hand, for a country, any company operating within its boarders using is ripe for exploitation. Unless a foreign company uses 100% foreign workers, and eschews all government inspections, then the knowledge is already exposed to your citizens. With the way CCP policy is, if a trade secret is exposed to anyone on China, it’s effectively lost completely since the government can directly disclose it to who ever they wish.

quoyn 6y ago

Reading the title and the url my first thought literally: "What? someone from Wall Street Journal admitted they are bought and paid by the Chinese?" Not joking here WSJ has admitted, after a lot of pressure, to receive money from China Daily it's just not very well known.

balola 6y ago

It seems he fell into a classic trap, the Chinese partner never intended to make cars, as the only product they ever produced is a Smart-like "mini-four-wheel-car", which was itself stolen from an HK student design. So the plan is quite apparent, the Chinese partner just wanted his reputation and brand recognition, in exchange for promised access to the China market, to leverage huge land quota (state controlled lucrative resource, highly coveted) and bank/government loans. It never planed to make any real cars, it's just a capital play to game and profit off of the system, like pennies for grands.

zhikanbumai 6y ago
Relevant news coverage in Chinese: https://translate.google.com/translate?sl=auto&tl=en&u=https://tech.sina.com.cn/it/2020-08-06/doc-iivhuipn7067803.shtml https://translate.google.com/translate?sl=auto&tl=en&u=https...
- runnerup 6y ago
  Thank you, this was an excellent read for myself, an English-speaking American. It's interesting how much of a big story this is locally for that city. Are Chinese news stories often this long and detailed? Is it extra newsworthy because Saleen / "Sailin" vehicle manufacturing was part of that province's five year plan? Or would this have gotten the same coverage regardless?
  - baybal2 6y ago
    The story enough fishy to look like a scam even by Chinese standards. 1. Doing business in China? Do it without govt. involvement. The less you see those guys the better. 2. Never do any joint ventures. Never deal with stocks, and public companies. 3. See a well wisher popping up on your doorstep with a business proposal? Turn the guy around, he is a scam. 4. Don't be public about your business, be as obscure as possible. Operate on online platforms. Have disposable shell company structures. 5. Don't ever get sued, and this is why you keep shell companies. Chinese legal system is almost as "sticky" as American one, if not more. Once the legal "casus belli" is established, and the court takes on the case, the plaintiff can keep suing you for all eternity.

worlddan 6y ago

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

de6u99er 6y ago

Reminds me of the TransRapid story. https://www.dw.com/en/china-masters-german-train-technology-will-cut-costs/a-1982476 https://www.dw.com/en/china-masters-german-train-technology-...

AlbertoGP 6y ago
Well, they did promise to cut costs to 1/3 of the German version, but they didn’t actually build it: “Originally planned to be ready for Expo 2010, the controversial project was repeatedly delayed, with final approval being granted on August 18, 2008.” “[...] In March 2009, the project was reported to be "suspended", although it had not been officially cancelled. The October 26, 2010 opening of the Shanghai–Hangzhou high-speed railway makes construction of this line unlikely.” https://en.wikipedia.org/wiki/Shanghai%E2%80%93Hangzhou_maglev_line https://en.wikipedia.org/wiki/Shanghai%E2%80%93Hangzhou_magl... But they keep promising it: Title: “China's 600 km/h high-speed maglev prototype completes successful trial run” Reading further: “The prototype didn't run at 600 km/h, but at a much lower speed as an operational debugging test.” And then: “According to CRRC, by the end of 2020, five high-speed maglev test vehicles will be rolled off the production line. Besides, a whole engineering system of the 600 km/h high-speed maglev prototype will be completed, which signifies China will master a whole set of the technology and engineering capability by that time.” “[...] China aims to put a 500-km-long high-speed maglev line into commercial use by 2025.” “[...] Using German technology, the Shanghai maglev line is a demonstration line. Since then, China has been striving to develop its independent technology in the field, where Japan and Germany have been taking leading positions.” “Step by step, the country is making solid progress. Analysts say that the successful test on Sunday signifies that China has achieved the same level as Japan.” https://news.cgtn.com/news/2020-06-21/China-s-600-km-h-high-speed-maglev-completes-trial-run-RvueeEECTm/index.html https://news.cgtn.com/news/2020-06-21/China-s-600-km-h-high-...
- redis_mlc 6y ago
  I was on the Shanghai-Pudong maglev train last year. They accelerate to 300 kph. It uses German technology based on 1920's era patents. It doesn't use superconductors. All the foreign passengers took selfies with the lead car in the background. :) There's an excellent maglev museum at the Shanghai terminal. The "maglev" rail stores yard is half-way along the route. AMA.

alloai 6y ago

There are two sides of the story, there is a Chinese version saying that there are a lots of frauds here. Car making is a capital burning business, you just can not do it without the wealth like elon musk. It's kind of a venture investment here, there were so many car investment in the past few years, when there were investment bubbles, but now, the bubble is gone.

magicsmoke 6y ago
I've read in a paper somewhere that a big part of why Chinese auto manufacturers aren't as successful as Japanese or Korean ones is because they're too tied to the local government to fail. Each province in China has their own local auto company connected to the provincial government, resulting in a lot of duplicated effort and inefficiency. Japan and Korea had a lot of indigenous auto makers when they first started as well, but they allowed the weaker ones to get bought out and cannibalized to build up the stronger ones.
- deleted 6y ago
  [deleted]
- xenospn 6y ago
  Japan has a very long tradition of quality and striving for perfection. China, not so much. And cars these days really need to be more than “good enough” to compete worldwide.
  - freddie_mercury 6y ago
    Japan's worldwide reputation was "garbage, low-quality stuff" until the 1960s. That's not a "very long tradition". "At first, Japan had a widely held reputation for shoddy exports, and their goods were shunned by international markets" For a pop-culture example look at the Back To The Future movie where the 1955 version of Dr. Brown says "No wonder this circuit failed. It says 'Made in Japan'." The 1985 version of Marty says "What do you mean, Doc? All the best stuff is made in Japan."

Ericson2314 6y ago

Honestly I don't have much problem with protectionism. Flagrant theft is no good, but when the companies enter in the domestic partnership the IP transfer is rather more de jure. And if China didn't take any IP they would continue to be massively under-developed and just a source of cheap labor, be cause there's no way in hell US companies would have willingly fostered higher skills, higher pay there. Let's face it, major US companies that outsource to China are doing fine, at least compared to workers, and we shouldn't start fucking WW III to raise their profits further. What's far more concerning to me is what is described in https://phenomenalworld.org/reviews/trade-wars https://phenomenalworld.org/reviews/trade-wars, the general race-to-the-bottom export dynamics where every country surpresses wages to try to stay competitive, and via the paradox of thrift not enough consumption has been afforded. This will ruin us. And we see the race to the bottom politically too, which follows. That book says bilateral tarries are a farce because commerce can route around them. As a programmer that makes....goddamn sense. They instead recommend general capital controls, which cannot be routed around. That also makes sense. How about we fix our rotten economy, reinvigorate society, and win a cultural war rather than loose a real one?

unishark 6y ago
> And if China didn't take any IP they would continue to be massively under-developed and just a source of cheap labor, be cause there's no way in hell US companies would have willingly fostered higher skills, higher pay there. We sell the training for those skills to anyone willing to pay as part of a huge education industry. You can just buy the textbooks on amazon or get many of them along with any other materials for free. Smaller countries in the west who couldn't possibly stand up the the big "bully" economies, and less developed regions like the US south, all have developed right up the cutting-edge with everyone else. They became developed by simply playing the game according to the rules. The real problem with developing countries is the ability tofollow those rules. The culture isn't fully-formed yet and some people are unclear on the line between stealing/scamming versus legitimate business. That doesn't mean stealing and scamming are a necessary part of development. It's the corruption that holds it back. Economic growth is based on people taking risks and making deals, which needs security and trust between them.

0-_-0 6y ago

What's up with the mass downvoting in this thread? I've never seen this before on HN.

neonate 6y ago

https://archive.is/oLIJl https://archive.is/oLIJl

Angeo34 6y ago

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

beaunative 6y ago

This happen to be a well-reported news on the Chinese internet where I was able to find more details. And the author's own claims are dubious and sketchy. It was never a three way deal, he may have deals with a Chinese company that owns share. That maybe why he said it's a threeway deal, but it's two two-way deals. He never made any deal with Chinese officials, but another Chinese business owner who made the deal with the government. The fact he didn't say is that the company was in debt and bankrupted, whose employees are still trying to get paid for their work. Another claim he make is that the local government did fulfill their monetary investment. The author said the money that the local government gave was not 'nearly enough', which is impossibly large tax-payer money, to build streamlined car production, but both parties agree to the deal in the beginning, it was the expectation. And the investor would of course, expect the invested to deliver the said product with said investment, which, as the author said, didn't happen. What's more. There is an whisleblower within the company who work in the accounting department shared with the public on open internet months ago that the non-investing shareholders of the company who didn't put in any money, instead intellectual properties, take mortgage out of their shares, which would be unacceptable in most investment scenario because unless the patents are sold, it's outright stealing from the investing shareholder who put in actual money especially so when the final product weren't made and sold. The accountant told the public that those patents are bought with 2.2 million US dollar but were valued as 100 million, and 'technologies' that were included in the valuation are yet to be perfected, that can't be used in production. This rant piece is nothing more than a shameful attempt to exploit American sentiment on Chinese 'property theft' trying to sway an on-going court judgement to the author's private financial interest. If there are any wrong-doings should be left with the court to decide, but there are enough ground for an investigation to be launched, or at least, for the investor to be angry. If the author actually ran an successful operation, I would feel sorry for him, the evaluation issues won't be a problem, but that simply wasn't the case. It is a catastrophic waste of public money for a failed venture of the author and his partners. I can not attest to if the author is making those claims unaware of those problems that he himself is also cheated by the other party, which is the Chinese company who mortgaged their shares and actually owns the patents. That company bought the company the author originally founded in the US, leading the private Chinese companies to own the author's patents. I'd say the Chinese government is the fool in this scenario.

FpUser 6y ago

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

11thEarlOfMar 6y ago

The US is in withdrawal from 4 decades of policy that intended to bring China out of the 3rd world and into the first. The motivation was to reduce the threat of nuclear war and at the same time, create a major new market for trade. Those positive intentions did not foresee what China would actually become, and even if US administrations all along could have foreseen it, they may have persisted, believing that reducing nuclear threat was worthwhile, even with the current adversarial outcome. The line that got crossed that I don't believe anyone anticipated was the genocide of entire ethnic and religious populations. Those horrors have a moral weight that counterbalances the threat of nuclear war. We have no choice but to completely decouple, and what's more, may still find ourselves in the shooting war we were trying to evade.

naringas 6y ago

intellectual property is conceptually corrupt. at the very least we should be honest and admit that it's all about being continuously paid for things we already finished doing (sometimes even generations ago). but I am pretty sure that it will have to get worse, far worse, so bad that a Kafka seems tame before people get convinced that ownership over language is stupid.

TazeTSchnitzel 6y ago
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
deleted 6y ago
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jonahbenton 6y ago
The other way to look at it is to recognize that it is hard to invent and prove the value of something, but easy to copy and pollute once that is done. We are all familiar with unfortunate examples of this. And yes, copyright extension, yadda yadda, but no one is being forced to enjoy, for instance, Mickey Mouse. That they do, and it endures and retains value- why is the creator not entitled to protect it as an asset for as long as people value it? And regarding the Kafka reference, the story of his stories is itself enlightening on this subject. We only have them, and the utility of the reference, through the protective actions of his friend. Were there no Intellectual Property, they would have been burned after his death. Cheers.
- chillacy 6y ago
  > why is the creator not entitled to protect it as an asset for as long as people value it? That masks the fact that IP laws are a form of regulatory capture. The original deal was to gain exclusive ownership _for a limited time_ at the cost of disclosure and understanding that it would eventually enter the public domain. Fun fact, before trademark laws were enforced, baggage makers like Louis Vuitton just increased the quality of their stitching / logograms in order to differentiate themselves. In fact the modern LV prints are a result of this process of trying to make his goods too expensive to counterfeit. Now luxury brands can stamp on inferior quality materials and sell just as well. There's no competitive force to increase quality anymore, these brands can just put their logos on decent-but-not-top-end materials.

cnl2020 6y ago

Is IP theft in China a problem? Yes "I would bring experience, design, engineering and related technologies developed over my 40-year career in the automotive industry building race cars and high-performance street cars. My contributions to the deal were valued at $800 million" Yeah. Sure. And then the ferry tale starts... (I live in China and work with some VC guys) " the joint venture applied for 510 Chinese patents for my designs, technologies, trade secrets and engineering developments. Most of the patent filings didn’t even list me as the inventor. " Yeh. Sure. I may believe this number since patents applied for/issued it is a metric for Chinese companies based on government requirements. 1 Person? 500 Patents? be assured that most of it are bullshit patents.

jkhdigital 6y ago

For some reason, after reading this article and a bunch of the comments here, I'm reminded of two quotes from two of my favorite authors: "Standards of living far below what we would consider to be poverty have been the norm for untold thousands of years. It is not the origins of poverty which need to be explained, since the human species began in poverty. What requires explaining are the things that created and sustained higher standards of living." from Wealth, Poverty and Politics by Thomas Sowell "Modernity needs to understand that being rich and becoming rich are not mathematically, personally, socially, and ethically the same thing." from The Bed of Procrustes: Philosophical and Practical Aphorisms by Nassim Nicholas Taleb

oger 6y ago

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

spectre8 6y ago

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

a0-prw 6y ago

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

bergstromm466 6y ago

"How can politicians look into TV cameras and say we have a free market system when patents guarantee monopoly incomes for twenty years, preventing anyone from competing? How can they claim there are free markets when copyright rules give a guaranteed income for seventy years after a person’s death? How can they claim free markets exist when one person or company is given a subsidy and not others, or when they sell off the commons that belong to all of us, at a discount, to a favoured individual or company, or when Uber, TaskRabbit and their ilk act as unregulated labour brokers, profiting from the labour of others?" - Professor Guy Standing also: 1. The current political economy is based on a false idea of material abundance. We call it pseudo-abundance. It is based on a commitment to permanent growth, the infinite accumulation of capital and debt-driven dynamics through compound interest. This is unsustainable, of course, because infinite growth is logically and physically impossible in any physically constrained, finite system. 2. The current political economy is based on a false idea of “immaterial scarcity.” It believes that an exaggerated set of intellectual property monopolies—for copyrights, trademarks and patents—should restrain the sharing of scientific, social and economic innovations. Hence the system discourages human cooperation, excludes many people from benefiting from innovation and slows the collective learning of humanity. In an age of grave global challenges, the political economy keeps many practical alternatives sequestered behind private firewalls or unfunded if they cannot generate adequate profits." - By Michel Bauwens, Franco Iacomella