Intellectual Property Rights in China
Part 2 of 4

A Pharmacy assures potential customers that its products are not fakes.

 

 

 

 

 


                                                 

Violations of IPR go beyond the publishing industry. When Yamaha, Mitsubishi and Honda wanted access to the massive Chinese market, they were told they had to form joint-ventures with Chinese state-owned manufacturers. Through these partnerships vast amounts of technology were transferred to the Chinese, precluding the need for any initial research and development on their part.  When an entrepreneur of a Chinese motorcycle company, not coincidentally named Hongda, commented on his success, he said, "To start with, we completely copied other people's stuff."[1] Of course, his motorcycles did require costly research and development. It was just all done in Japan.   

Shortly after it was founded, the Chinese automobile company Chery introduced a new sedan designed to compete with the Volkswagen Jetta--at the time, the best selling car in China. When it was realized that Chery's primary investor had joint-venture connections to Volkswagen, the German automaker investigated and found not only that the car had a striking resemblance to the Jetta, but that it contained many of their own original parts.[2]  

Fakes plague many sectors of China's manufacturing, from golf clubs to medicine to powdered baby formula. Scam artists spray paint their cell phone numbers in public places to hawk fake IDs, work permits, licenses and degrees. "A whole identity makeover with a Ph.D. in rocket science can be bought for less than $100."[3] 

These intentional frauds certainly clash with the Confucian background of Chinese civilization which stressed reverence and virtue. Moreover, they violate the provisions of China's admittance to the World Trade Organization in 2001. To be fair, China has stiffed the laws protecting IPR and the situation has measurably improved. Yet violations of IPR remain one of the most troublesome aspects of China's new market economy. To understand why, we must place China’s commercial growth in the framework of its legal and political traditions, a context much different than that in which market capitalism was conceived and cultivated in the west.

Notes:
[1] James Kynge, China Shakes the World, p. 56.
[2] Ibid, pp.58-59. 
[3] Ibid, p. 163