25 January 2008

China: Scratching its Way to the Top by Industrial Espionage, Counterfeiting, Reverse Engineering, Spying, Cheating, Bluffing . . . .

China poses as a rising star in the world of commerce, industry, technology and science. But China's recent stock market scare reveals how closely China's success hangs upon financial and technological achievements in the west. If China were unable to steal, counterfeit, pirate, and reverse-engineer superior achievements of technology and science in the west, how many decades behind the west would China be?
The government believes that, in the next few years, China will surpass South Korea in technical abilities, and Germany in GDP. While China is still a minor player in the world of military high tech, the government is putting lots of money and effort into changing this. Expensive, and long term, efforts are being made to produce high tech items like jet engines, missiles and military electronics. At the current rate of progress, Chinese military technology will match that of the United States in a decade or so.
Strategy Page

In a mad rush to surpass the west, China is poisoning its air and water, destroying and depleting its topsoil, stealing from its trading partners, sending poisoned toys,food,and other merchandise overseas, misrepresenting the size and health of its banks and state enterprises, and becoming the world's leading destructive state computer hacker and possible currency counterfeiter (via N. Korea).
...there is a long record in China of sending government-directed missions overseas to buy or shamelessly steal the best civil and military technology available, reverse engineer it, and build an industrial complex that supports the growth of China as a commercial and military power....The allegations against Chen Jin, of Jiaotong University in Shanghai, are an example of the entrepreneurial approach people take toward industrial espionage and intellectual property theft in China. Chen returned to China after earning a Ph.D. at the University of Texas at Austin. In 2003, China treated Chen like a national hero for inventing China's first signal processing microchip. Last week, Jiaotong University dismissed him, and Chen stands accused of hiring flocks of migrant workers with good manual dexterity and great eyesight to scratch the name "Motorola" off chips and etch in the name of Chen's company, "Hanxin."

Is the government involved in Chinese counterfeiting? What do you think?
The second point is equally important. The piracy and counterfeiting that exists in China is largely the result of a tacit government policy to allow such practices to flourish. China has a relatively comprehensive set of antipiracy statutes on its books. However, little or no enforcement exists, and what fines and punishments do exist serve as only weak deterrents.

The reason for China's tacit sanctioning of widespread counterfeiting and piracy is that the Chinese government is well aware of two things. Counterfeit and pirated goods sold domestically help keep inflation low, and selling these goods internationally creates jobs and export revenues.___Source

Some of the counterfeit exports being sent overseas from China present a significant hazard to the end users.
Counterfeit high-tech items are a growing business, and a growing danger. In addition to computer gear, auto and aircraft components are also being faked. Some aircraft and auto accidents have been traced to the fakes, which makes it a public safety issue. But with the Department of Defense installing counterfeit computer components, it becomes a national security issue. There's also the fear that the Chinese, or some other hostile nation, might get their hands on real computer components, and replace some of the chips with modified ones that will make government networks easier to hack. Yes, it just gets worse.
Strategy Page

China is destabilizing the world's security.
China’s goal is to dominate in all sectors – from the lowest, most labor-intensive sectors to the highest and most advanced technological sectors – as quickly as possible. To accomplish these goals, China must have access to advanced technology. FDI gives China this access. Once the advanced technology is introduced into China, China gains access to the technology. Some of this access is lawful, but much of it is through unauthorized copying, theft, and counterfeiting, all of which allows China to obtain technology transfer without the payment of fees.___Source
China's recent moves into the third world, including Africa, should raise eybrows--particularly regarding the tendency of Chinese consumer exports to be poisoned.

The upcoming Beijing Olympics are a source of pride for the Chinese CCP, but amid all the other illegitimacies, is China hosting a counterfeit Olympics? There is significant international concern over the safety of food and water to be provided by the host country for Olympic athletes and guests. I wonder if the Chinese people themselves are wondering about the future safety of Chinese food and water? No, they're too busy worrying about the present.

China wants to be taken seriously by everyone, including the world's superpower. To accomplish this, China intends to gouge, steal, lie, cheat, copy, counterfeit, hack, intimidate, subvert, proliferate nukes, reverse engineer, spy, and bluster its way to the top.

In the process of its grand strategy, China's people and environment are being poisoned, while the world's environment is sullied. China's pro-proliferation policies and close friendships with state sponsors of terrorism such as Iran and Venezuela, suggests long term plans to destabilize the islands of prosperity within both the developed and developing worlds.

Nothing about the method of China's rise suggests the intent to become a responsible world co-citizen. Nothing indicates a will to create a better world, with prosperity and security for all. Instead we see a Chinese CCP hell-bent to achieve superiority and hegemony in every area--while destroying its own ecology and the ecologies of East Asia. There is nothing admirable or encouraging about China's gutter tactics, its quasi-criminal methods of achievement.

We will see how long the civilised world can ignore China's criminal underworld nature, and what the consequences will be for having ingnored it from the days of Bush I, Bill Clinton, to the present.

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Blogger Bruce Hall said...

I agree with your assessment of China's motives:

Almost three years ago, I wrote about the efforts of General Motors to team up with the Chinese and gain wider access to the Asian markets... and how it could backfire because of the Chinese propensity for piracy:




Your post is spot on.

Friday, 25 January, 2008  
Blogger al fin said...

Thanks, Bruce. I appreciate the links to your posts, since I have learned to respect your viewpoint on these matters.

Friday, 25 January, 2008  
Blogger brian wang said...

It seems that China and the chinese people have on the whole benefited from this behavior (not counting the bad pollution which they need to fix and are taking some steps to address)

If they had not and were 15-20 years farther behind in technology it seems that they would be worse off. Poverty and backward technology were causing bad things to happen and the environment was still on the way to sucking.

And are the western economies and companies totally worse off from the current situation ? China is developing a large middle class who will be buying more and more stuff and a lot of it will be from the West. As China has an economy to protect and soon more and more of its own intellectual property then it would make sense to start playing with the rules of the developed countries.

Plus since the not nice means of catching up is mostly past tense then other than trying to close the gate to follow on countries (Vietnam, Philippines, India etc..) then it would make sense to make the best of the new hand that has been dealt. Although I think that allowing the catch up is a good thing. It is better than having a bunch of poor-semi failed states around.

Friday, 25 January, 2008  
Blogger Snake Oil Baron said...

I agree with the concern over China's negative impact but I also agree with the importance of the growing middle class and poverty reduction as BW mentions, as well as urbanization which is now spreading inland from the more urbanized coastal regions. In addition to a growing appetite for stuff, middle class lifestyles fuel middle class values and a desire for things like property rights, accountability from people in charge and a desire to see corruption tackled. Even if the desire for free speech, expression and liberty are as successfully suppressed as many think (rather than just lurking beneath the surface), further growth will require accountability to markets, and other influences.

Chinese foreign investment in Africa and other places is a mixed blessing but where it is done wisely it does a lot of good and where it is done poorly (especially in dictatorships) it reduces their long-term influence - a win win.

China will mostly learn by experience rather than by the example of mistakes made by other nations during development. This is, unfortunately, human nature. China's development - economically, socially and politically will be long and troubled but it should follow a generally positive trend even if claims of eminent global dominance are far fetched.

Friday, 25 January, 2008  
Blogger al fin said...

Indeed, Baron, China--and the world--will learn with time. Unfortunately, sometimes those lessons last for centuries.

Personally, I expect the Chinese CCP to die of its own excesses, like the communist parties of Cambodia under Pol Pot, the USSR, the communist parties of most of Eastern Europe, etc.

The history of China is rich with competing kings and warlords, ruling over huge swaths of territory. I see no reason to think that history has been discontinued.

Saturday, 26 January, 2008  
Blogger Snake Oil Baron said...

It will be interesting to see what effect a massive, educated middle class has on the traditional dynamics of that society. I would not rule out a transition to military rule after the communists drop the ball but who can say for sure. Such a regime would have the same problems as the communist party of trying to sustain a modern economy with the traditional methods of centralized agrarian hierarchies.

Saturday, 26 January, 2008  
Blogger Marilyn said...

Nice blog. Keep up the good work. Cheers:-)

Monday, 28 January, 2008  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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