Counterfeiting in China and Lobbying Sessions With Dr. Whitaker
November 9th, 2006
Great sessions today with Dr. Whitaker! When you see him on campus or in town, be sure to thank him for his time. See also this recent related Wall Street Journal article that appeared, A Small Firm Takes on Chinese Pirates.
I want you to put yourself in his shoes trying to make a “pitch” to a government official in China to move forward with and support one of their “block and knock” raids. What would be your talking points? In thinking this over, also remember Dr. Morris’ history talk on resistance in China to giving the West another chance to carve it up like a melon — what things would you touch on and/or try to avoid in your pitch to this Chinese government official to convince him/her move forward and help you against one of their own countrymen? For those of you reading James McGregor’s, One Billion Customers, as a hint and for some ideas, be sure to check out Chapter 4 in his book (Dancing with the Dinosaurs).
Also, I want you to give some thought to why IP violations in China are so difficult for the Chinese government to deal with and shut down. Why is this the case? What are the political, economic and social barriers to China doing so? (Here, don’t focus on the Confucian reason often given by the West of “it’s a complement to be copied” — rather, focus on the possible political, economic and social constraints. I think the Conufucian reason stated by many Westerners is a red herring because Confucianism really states the the complete man/women emulates behavior of high moral integrity and character and I am not sure that copying someone else’s work fits that bill).
Finally, for those who also had the good fortune to be in Dr. Anderson’s class and hear Dr. Whitaker talk about lobbying, you were able to see a facet of the cold, harsh reality and landscape of American politics and our system. While in China, when we visit an English Corner, you will likely be asked by one of the locals whether you think the US or Chinese “system” is better. Most of Americans will say, “the US, of course”, but then you will be asked why. If you then give the normal American easy out answer of “we have more freedom” they will push you on that, and then ask “what is freedom?” and “what makes you think we don’t have that (freedom) in China”? What will you tell them in response to both questions that is credible, true, and sincere? Relatedly, an American who has lived in China (Hangzhou) for the last 5 years, Mark Jones, has also done a lengthy, very insightful and thought-provoking peace on freedom, governance and the development of a civil society in China that I would encourage you to read. Though I may not agree with all of his points and a few things he mentions do not match up with my own experience in China, I still thought he made some great points that have caused me to rethink some of my own perceptions and biases re: China and the West. What he writes will also help get you inside the head of the Chinese and better see and undertand how they see the world (including the US) and certain issues (and many thanks to the China Law Blog for bringing my attention to this post by Mark Jones).
Entry Filed under: Pre-Departure, Shenzhen, China, Misc.
6 Comments Add your own
1. Ashley Smith | November 10th, 2006 at 10:38 am
I believe there are a couple reasons why IP theft is difficult to stop in China. The first is because of the Chinese work ethic combined with the fact that China’s public assistance is what we would consider sub par. The families struggling to survive in China need to find some way to support themselves and for many, IP theft is probably the best solution. Therefore, the mindset of hard work, dedication, and constant improvement is applied towards not only making counterfeit goods but also evading the law as a means of survival. We see illustrations of this throughout the Bose speaker raid where labels were exact copies and speakers were strategically packed all in an effort not to get caught.
Secondly, I think that IP theft is so prevalent in China that the government has to pick its’ battles. How could it possibly stop all IP theft in the entire country? It’s like the American government trying to stop all drug trafficking. It’s not possible. Therefore the Chinese government will enforce IP laws when it will benefit them. In other words, it will stop IP theft when it makes the government look good or when it improves relations with foreign markets/companies. Dr. Whitaker provided us with a perfect example of this in his presentation. After the counterfeit speaker raid there was a public ceremony involving the US Embassy, a representative from Bose, the Chinese government and local officials in which the speakers were destroyed.
2. Chris Carr | November 10th, 2006 at 12:41 pm
Exactly. Ashley has nailed in on the head.
All of my friends in China, whether they are educated, uneducated, rich, poor … whatever, tell me over and over:
1. If the government puts all these people in China out of work by clamping down and arresting them, what will they do? We are scared to death in China of the social unrest it will cause (which is Chinese code for “we don’t want to see another period like the cultural revolution here”).
(As an anaolgy, albeit an imperfect one, if the US taxpayers wanted shut down what many view as the over subsidized and over protected steel industry in the US, would we have the political guts to do that and throw those folks out of work with no realistic Plan B for them to feed themselves?; further what kind of social and political unrest would that cause, particularly in swing states such as Ohio and Pennsylvania?).
2. Yes, great things are happening in China, but we also have many major issues and problems to solve. What makes the US think that in a country of 1.3 billion people we have the time, desire or resources to put their IP theft concerns at the top of our work flow list?
I have never been able to come up with a good answer for their points in this regard, particularly where I could look them straight in the eye and credibly defend what I say.
3. Erik | November 10th, 2006 at 2:44 pm
To comment on Chris’ point #1:
Isn’t it human nature to adapt? I agree that if we flipped the switch and Monday morning there was no steel industry in the US, that would cause a lot of problems. What if alternatively, the steel industry’s subsidies were slowly taken away. The folks who work in that industry would undoubtedly adapt and learn new skills and take on positions in other industries. Even if they didn’t adapt, aren’t we just talking about different forms of welfare?
So now apply this to China. Obviously China can’t eradicate counterfeiting overnight - it will be a gradual process. To follow back with Chris’ analogy to our steelworkers, I will maintain that the individual workers will adapt. The skills these individuals have learned or perfected while working for the counterfeiters could be applied to more honest endeavors. As long as the guy earns a paycheck, he probably won’t care who he’s working for. And further, I suspect that if Bose (or any other reputable company) decided they could establish a legitimate plant in China, the working conditions and benefits will be better than what we saw in Dr. Whitaker’s photos.
This is no different than any other difficult decision. Whoever makes it will be a goat in the short term and a hero in the long term.
4. Erik | November 12th, 2006 at 6:59 pm
Here’s an article that popped up on the WSJ today:
http://online.wsj.com/article/SB116337696901921127.html
In a nutshell, Twentieth Century Fox is going to try to combat counterfeits by selling legal DVDs for 20-25 yuan ($3/disc). This would be in contrast to the bootlegs that are selling for around 10 yuan each. Fox is going to try to convince customers that the extra content and clean copies are worth the premium.
5. Chuck Rylant | November 23rd, 2006 at 11:39 am
I enjoyed both of Dr. Whitaker’s lectures. The China lecture quashed some of my ill-informed ideas about the Chinese government. I have never researched intellectual property theft in China before, but I always believed the Chinese government supported and encouraged these practices. I think many Americans are led to believe government corruption is more prevalent than it is in China. It was obvious the government was interested in stopping this particular incident. As Ashley mentioned, it was in the government’s best interest.
I was fascinated with how similar, but at the same time how different, the “block and knock” was to the service of a search warrant by U.S. law enforcement. The term “block and knock” is very similar to the term “knock and talk,” which is commonly used by U.S. law enforcement. A “knock and talk” refers to the search of a premise based solely on consent of the property owner. This is typically done with no probable cause or warrant signed by a judge. In the U.S., the forced entry into a premise requires a search warrant signed by a magistrate, unless some type of exigent circumstances exists. From the lecture it appears that the Chinese law is vastly different than U.S. law and this discussion has sparked my curiosity about Chinese search and seizure laws.
6. Chris Carr | November 24th, 2006 at 6:32 pm
As I understand it, the search and seizure laws are not that different between China and the US. They (PRC), too, require something close to “probable cause” to issue a warrant to search. However, the big difference is that they can work with the local administrative agency officials who have jurisdiction over the case (and any number of them do) to get a warrant to search issued and they don’t even need to bother a judge; and hence, the administrative officials tend to rubber stamp more warrant requests than a “traditional judge” wearing a black robe who would ask a lot more questions would do. As I remember, Steve said they had to make a pretty strong showing to the local admin agency officials and police to get their help, as these folks don’t want their time wasted and/or to be embarrassed by crashing in on an abandoned warehouse while the local press films it.
Leave a Comment
Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
Subscribe to the comments via RSS Feed