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Comment by blondie9x | Hacker News Reader

Just wish China government would agree to the demands on intellectual property and tech patents transfer. Getting to a deal could be really easy if China stops the intellectual property and transfer requirements.

https://en.wikipedia.org/wiki/China–United_States_trade_war

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Oh, they'll agree. They are even a member of the WTO, and even have laws on the books about IP.

They just won't enforce anything, unless it's to their own benefit, been that way for decades.

i wonder if this is a cultural thing or a gov/business decision directed at foreign companies. do chinese business people rip other chinese business people off?

This is the PRC playing high-speed high-stakes catch-up to the rest of the world. China was nothing of any geopolitical significance prior to the cultural revolution. The colonial powers were clearly in charge of the world, with Portugal owning Macau from 1557, the British owning Hong Kong from 1841 and the French, German, American, British, Danish and Italians each owning sections of Shanghai in the 1800s. The French Concession being the best known.

At the time of the HK handover in 1997, HK represented a whopping 18% of all of China's GDP. Today, HK represents only 3% of China's GDP. This happened in only 20 years.

China is doing what I can imagine any other country in their position would do: take advantage of foreign companies using their discount labor pool to obtain the technologies necessary to first become self-sufficient and eventually to lead.

We're at a juncture now, where for better or worse, the US is no longer willing to put up with the status quo because the myopic policies of the past, focused on self-enrichment, are coming home to roost. It's probably too late honestly, whether American companies withheld the last few years of advancements or not, the Chinese have developed sufficient domain expertise to catch up and lead on their own in short order. They do have 3X the US population after all, and appear much more motivated in their pursuit of science and technology than the US is.

This point in history represents a number of long-term story arcs coming together at once. I'm not condoning it, there's lots of history here.

Hong Kong was created from scratch under British rule -- it was a sleepy village that the British identified as a terrific potential deep water port. This is important in understanding the current crisis there-- there's a degree of historical and cultural separation from "mainland" China in Hong Kong's roots.

While true (and historically a place where people fled the mainland in general, AFAIK), it doesn't change the fact that allowing this settlement in the first place is indicative of a power imbalance at the time. For instance, if the Chinese wanted to set up a colony in the Channel Islands today (Jersey, Guernsey, Isle of Man, Isle of White), I'm pretty sure that wouldn't go over well. Nor would the UK attempting to set up shop today, say, in the South China Sea (in the Spratleys for instance). The balance of power has definitely tipped.

China is doing exactly what you say with islands in the Pacific that they promised not to militarize and then moved in military bases. There balance of military power hasn't tipped at all, the western countries just stopped thinking it was okay to establish permanent settlements in other people's countries and then use that to claim we owned it. We still create best permanent military bases when we want to. If Britain or the US wanted we could destroy the Chinese Navy and Air Force without blinking. It's only when you get to ground forces that you see any kind of advantage in the Chinese military, because like the USSR in WW2 there are always more bodies.

> There balance of military power hasn't tipped at all, the western countries just stopped thinking it was okay to establish permanent settlements in other people's countries and then use that to claim we owned it.

Isn't that power? Power doesn't necessarily mean carrying out actual warfare, it means being able to do whatever you want without anyone stopping you. "We could stop them if we wanted to we just ... don't want to, yeah that's right..." rings pretty hollow. The fact that zero enforcement action has been taken means China is more powerful in the region.

All the UK can do to enforce the handover agreement is write strongly worded memos that get sent right into the shredder in Beijing. Similarly with the islands in the South China Sea. The response is basically "what are you going to do about it?" Not what could you do about it.

It's cultural. There's a serious adherence to the phrase let the buyer beware, however it's almost impossible to solve locally because if you acknowledge a problem you're apparently responsible for fixing it or you can be disappeared if it makes the country look bad. China is a very unique country with interesting sets of values. The whole global recycling chain got upended because a movie in China showed how nasty and harmful the recycling process is for low end plastics and metals which embarrassed the country. I remember there was an official who got in trouble for smiling at an inappropriate time. Almost everything is about appearance, much like the US early in it's ascendancy. China will eventually change when it's in their best interest to protect other people, it's not as if the US doesn't do very similar things to some of it's allies. Just look at the chicken tax or Canadian business suits for example. It's just in our best interest to enforce IP law currently because we own some of the most valuable IP. We over protect a ton of it too. That's nothing compared to our blatantly excessive copyright laws. Simply put it massive rent seeking behavior on the part of the US. As far as devaluing their currency, it's one of the few cards they have to play but it will hurt them in the long run as it means their foreign investments will lose value unless it's in real estate.

As a macroeconomist, coming from a degree in applied mathematics, I can only emphatically ‘second’ this statement. There’s many ‘dynamics’ in macroeconomics but unlike physics there are few “conserved quantities” (even ‘wealth’ isn’t a conserved quantity) that might allow one to distinguish between plausible and implausible scenarios The end result is that prediction is basically a retroactive decision as to which axioms to adopt.

op isn't making an economical prediction but a political one

My argument is that at suitable levels of power there is no distinction between the two.

Thanks for your honesty; I get really annoyed sometimes when economists are held up as the gold-standard of societal prediction. Some of the 'newer' ideas that have made their way to the core of economics study, like game theory, are still painfully simplistic models that fail to take into account more complicated dynamics that result in outsize error signals. Usually, in the physical sciences it's possible to justify throwing out some higher order terms, but when you start talking about "externalities", things can get unhealthily misrepresented quickly. Frankly, it's no wonder that our species hasn't achieved a higher level of self-reflection when human behavior itself is so complicated.

I came to macroeconomics by way of game theory. I'm going to step in because it's actually a far more sophisticated discipline than one would at first imagine given the (admittedly extremely pedagogical, verging on the puerile) examples one is likely to encounter when not studying it in depth (Prisoner's Dilemma, I'm looking at you). Combinatorial Game Theory has been fundamental in addressing “artificial intelligence challenges” such as defeating human Chess grandmasters and more recently, despite the hype about neural network self-training, Go. Bayesian Game Theory deals with how a rational agent starts off in a situation whereby it knows little of what it is competing against and gradually refines that knowledge whilst also getting the best results given the imperfect information available. Differential Game Theory de-discretises time and is useful, for example, in programming both the manoeuvres to be executed by a surface-to-air missile as the target attempts evasion and in modelling a financial market. Algorithmic Game Theory is concerned with measuring the computational complexity of various strategies, and ensuring that they are in fact computable. Taken overall, it is a very complete and compelling field of knowledge. The problem is that we game theorists tend to assume that because we found an optimal solution by some advanced analytical technique, it should/will be observed to be the norm “in the wild”; sometimes this turns out to be the case, perhaps because there are cumulative or incremental adaptive paths to arriving at it, oftentimes it does not (typically because it's of the “bolt from the blue” variety). Most game theory research publicised is often of the “so simplified it doesn’t obviously apply” (even the most banal thought-experiment, that of the one-shot Prisoner's Dilemma, involves somebody in police custody essentially making a decision whether to spend their life in jail or being fried on the electric chair, a pretty extreme decision to be making on the spur of the moment and all the assumptions made regarding this scenario, including the iron-clad case against them by the investigators and knowledge that the co-conspirator is also in police custody, are fairly unrealistic).

There's a lot of things game theory is very good at and has contributed to. It isn’t represented very well in publicly-accessible material and what is expressed comes across as markedly simplified to the point of irrelevance (which the examples are). But it’s a very powerful tool, actually.

Why? They're sovereign. They want a leg up in their economy. They're doing the same thing the U.S. did to England to get ahead [1].

[1] https://www.realclearmarkets.com/articles/2018/07/30/ip_thef...!

Yeap. Copying tech is a common pattern developing countries use to grow faster. Pot, meet kettle.

Why would China ever want to allow that U.S. companies to sue the living crap out of local businesses because of copyright? Is there anything that China can win here? I always thought the chinese governments strategy was to grow local businesses. Global copyright enforcement would stomp that.

I'm still amazed how they are not under sanctions for wholesale IP theft.

They must have thousands of key decision makers in the West in their pocket.

Western companies have been happy to hand over IP. It's part of the deal. If they didn't like the deal, they wouldn't have gone to China. It can't be called 'theft' when it was willingly given.

Pretty certain that wholesale theft was not part of the "voluntary deal". Can you point to exact language in agreements that granted them absolute rights to any IP?

However, the western executives that signed those deals, have long made their massive bonuses, it's all been paid out and some of those execs probably even retired. What do they care?

Such a great way to raid the company you manage at the expense of shareholders/employees.

> Can you point to exact language in agreements that granted them absolute rights to any IP?

Those agreements between private entities are almost certainly not public. However, I found a press release by Siemens AG [1] that says "Part of the contractual terms and conditions involves support and technology transfer in connection with production of the trains." In another press release [2], a Siemens VP is quite chipper about this: "Siemens is even more confident to support the development and modernization of Chinese railways and transfer highly advanced and proven technology of international standard to China"

I don't think you can speak of "wholesale theft" in this case of a voluntary deal.

[1] https://www.siemens.com/press/en/pr_cc/2005/11_nov/tstr20051...

[2] https://www.siemens.com/press/en/pr_cc/2006/04_apr/tstk20060...

Read something other than marketing materials for PR purposes.

The CEO of Siemens at the time was Klaus Kleinfeld. The bribery scandals were so bad in 2007 that he was forced out, and forced to settle with Siemens, 2 millions euros.

https://en.wikipedia.org/wiki/Klaus_Kleinfeld#Bribery_invest...

Now, ostensibly, these were scandals about Siemens bribing other countries. Do you think people at Siemens, with such high moral integrity, managed to pocket some bribes themselves?

Perhaps in exchange for handing over valuable IP? What's a signature or two between friends.

I don't see a reason for discounting Siemens' own PR department as a source for what the decision-makers at Siemens think of deals they make. Whether they were bribed to agree is a different matter. In any case, it was public knowledge that technology would be transferred, so still not something I'd call "theft".

Generally for IP violations, you get sued. Like Huawei has been sued a bunch.

>Still, the State Department warned - as it had for years - that publicly confronting China over its online economic warfare would damage relations with Beijing, so American government statements about the hacking did not disclose the scope of China's efforts.

https://www.newsweek.com/2013/11/01/how-edward-snowden-escal...

When did China originally start disrespecting intellectual property? Or is it the case that they've never respected it? Do you know of a good resource to learn about the history of this topic?

Developing nations (as the US was in the past) typically do not care much about IP. Read "The Lever of Riches" for a history of economic growth and IP law.

Traditionally nations only started respecting foreign intellectual property when they started to generate more IP that they wanted others to respect than they used from outside. For example, in the 19th century, the USA didn't respect British copyright. Charles Dickens was a very popular author in the USA, but he didn't get a cent from the sales of his books there. So he came over to the US a couple of times to give lectures in large auditoriums in major cities -- sort of like a rock star making money from touring rather than from album sales.

I think the reverse question is probably more appropriate. That derivative civilizations from the mediterranean maritime trading cultures have a higher geography driven disposition to sanctifying contractual agreements since that's how they subsisted life.

This is not the case for self-sufficient continental cultures like agrarian China where equality of all men isn't how you get flood control and irrigation projects done and creativity and disrupting how seeds are planted isn't what keeps you alive.

Beijing has an extremely long time horizon. They will endure the Trump administration and wait for a successor government to be more pliant to their needs.

Kyle Bass would disagree.

The USA has an extremely long time horizon. They endured the Qing dynasty, the PRC, the troubled times under Mao, and now bide their time patiently, waiting for a successor government more pliant to their needs.

I’m not fond of this whole “Eastern mysticism”/100-year-horizon crap; that sort of thinking is just soft-soled racism—along the same lines as the Noble Savage trope.

I hadn't thought of it that way and its an interesting point but in terms of racism I think its only something people think about the Chinese government. I don't think anyone attributes the same characteristic to American born Chinese.

It's the exact same thing that was said about Japan during its boom phase in fact. It was universally proclaimed that Japan was different because they had a very long time horizon and the West was short-term obsessed. It obviously plays into the eastern mysticism you reference. It's why Masayoshi Son has any credibility when he talks about having a 300 year plan for the Internet.

Back in reality, you can find countless examples of China behaving with rather absurd short-term obsession and making foolish mistakes due to that short-term thinking. They're doing it right now with Hong Kong. Or for example, in the way they've been willing to become the most leveraged nation in world history at record speed merely in order to buy a few more minutes of faster short-term 'growth' before they have to accept slower real growth in the system. That's long-term destruction in exchange for a short-term prop-up, something that is counter to the fantasy projection about China's long-term magical behavior. It also happens to be exactly what Japan did, exchanging long-term damage (resulting in long-term stagnation as the extreme debt robbed their economy of all of its dynamism) for a short-term propping up of the economy.

The idea that China will ascend without having to change seems silly to me too. Either the great firewall will come down or the country will stagnate. Economics and sociology doesn't change simply because the government says it does. China is either due for a massive correction or another civil war. People will only take being oppressed for so long and generally they stop taking crap from their government when things are getting better not worse. How things shake out in Hong Kong are going to echo through China.

Sure, their horizons are long-er term. Xi will be president for life, no term limits.

They do have a long time horizon, and on that horizon is a point at which China no long substantially relies on exports to the U.S. and can reject U.S. demands without fear of significant disruption to its domestic economy. Indeed, everything China has been doing has been designed, in part, to hasten that day.

Total exports as a share of China's GDP have been dropping since the mid 2000s. They're now below 20%. Americans, and especially American pundits, however, seem to be living in the 1990s and early oughts, when exports peaked near 40% of GDP.

China still has huge poverty problems, but what's changed is that both China and the world have grown up and fully industrialized. The entire world is China's market now, not just the richest, Western nations. The world is a much bigger, wealthier place today than 20 years ago, and the trend will only continue.

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