How Chinese Officials Hijacked My Company | Hacker News Reader

How Chinese Officials Hijacked My Company

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329 pointsilamont249 comments

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-s...

>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.

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.

> 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.

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.

Non-compete agreements are quite weak in California, and yet that's where much of the U.S. technology industry is located. This suggests that weaker enforcement of such "protection" can actively promote growth, not just exploitation.

They aren't hard to steal when your building another companies products for them. Eventually you're the one that has all that not them.

20 years ago I was saying the mistake American Businessmen were making is they thought they somehow owned all those factories in China. And they did not at all. Since then Chinese companies have been taking over design as well. You spec it, they figure out how to build it at scale. All that IP they own not you.

How do you out-innovate a country which has less regulation, more intrusive surveillance, more factories ready to churn out whatever you invent, more workers (and Uighur slaves) ready to do the labour for less, and no qualms about stealing anything and everything you come up with and copying it at a scale you can't possibly match?

Maybe try do the same thing? Less regulation, more factory, more monitoring doesn't always mean bad thing. Cheap worker can probably be replaced with advance automation. I disagree that its a "stealing", you still have the knowledge.

Escalation may not be an efficient tactic, especially in this case, it would also mean a downgrade for businesses and consumers who benefit from said regulation in many countries.

One option is to enforce some standards for trade - no slave labor, limit number of hours worked, environment protections etc. Thus way we all are playing by the same rules. This won’t be easy to implement - most western democracies can be corrupted by money and influence and CCP can easily buy with money.

Are you actually being downvoted for suggesting this?!

Sabotage that the plans

Perhaps we could stop dismantling the domestic economy by implementing policies that reward domestic investment? Huge swaths [0] of the country are losing their livelihoods due to offshoring and monopolistic practices.

[0] https://policybynumbers.com/economic-stagnation-and-electora...

there are hard problems in the world. we need rational national strategy to give ourselves a chance.

One way is to make your country an attractive place to live for the top innovators from around the world. China can’t do that. This is a proven strategy for the US that is being sabotaged by the current US administration.

and yet we find ourselves in this situation despite this proven strategy. do you think this theft began in 2016?

the american manufacturing base and a great deal of its skilled labor pool has been gutted and hung out to dry for the last 40 years. we're only now waking up to the true cost.

Knowledge creation and discovery is the engine of economies today. You might as well say "why don't you let everyone live in your house for free"

People who create need to be able to benefit from that creation.

Knowledge creation and discovery always builds on previously discovered and created knowledge. There are many ways of benefiting from this activity, even more so without a formal IP-based business strategy.

Please, describe something sustainable that doesn't involve keeping it secret.

Are there businesses built on open-source? I think I heard of such a thing but I haven't researched it.

Not many successful ones in comparison.

It's a prisoner's dilemma type situation.

Also known as the natural order of things.

Sounds like an engineering challenge.

Yes, the most notable one is RedHat:

https://www.redhat.com/

Some more are listed on the FOSSjobs wiki:

https://github.com/fossjobs/fossjobs/wiki/resources#employer...

GNU/Linux.

Aware of any cottage GNU/linux-like industries where people earn a living besides consulting?

>People who create need to be able to benefit from that creation.

I agree, its just the strategy can be changed to not rely on IP.

Feel free to suggest one.

Even things like Patreon likely would not work without copyright, as people would just steal the work and republish it on another medium. Open source business models couldn't work without copyright, and there is a minor rebellion underway in OSS against highly permissive licenses due to rampant corporate exploitation (e.g. "SaaSification" and rebranding and commercialization that robs the authors of even credit).

Virtually every suggestion I have ever heard for a fix to this greatly underestimates the petty avarice of humanity. If it can be gamed or stolen, it will. Some people have to be forced to treat others fairly, and there are enough cheaters to destroy any pure goodwill based system the instant an attempt is made to scale beyond small communities.

This is also why all goodwill based open protocols and systems are instantly destroyed by spam, trolling, and other bad faith usages as soon as they start to scale.

Everyone is not an asshole, but it doesn't take many to burn things to the ground.

Some strategy I can think of: be the first to market, market yourself as the original creator, constant innovating, other people can copy but they can't control the updates and product roadmap, and you have the advantage of intimate knowledge of the product.

Another strategy is to create personalized custom solution. This would be hard to copy, unless you can copy the creator brain.

No one cares if you're the original if someone is offering the product for half the price because they paid $0 for R&D.

This is a really pathetic viewpoint to hold and I wonder if you actually live your life by these standards.

Like I said, if you are the original creator you have advantage the copier doesn't have.

Another way is to provide customized personalized solution. That would be very hard to copy.

How is these pathetic?

Either way you have to adapt or left behind.

Yes, that is what you said, and I think it is quite wrong. Being the original creator doesn't mean much when others can copy your design and not pay any of the costs associated with developing it in the first place.

Personalized solutions might work for some products but not for others.

It is pathetic because it treats illegal behavior as if it you are powerless to stop it. It would be like if your house kept getting broken into, and someone gave you advice to stop owning things, instead of say putting up security cameras, strengthening the locks on your door, or buying a gun or guard dog. I can only imagine you've never created a single thing in your life if you think that other people automatically have a right to take whatever you do and do whatever they want with it.

"Adapt or be left behind"...of what? Once people steal the IP, it is unlikely they are going to all of the sudden become great innovators in the field. At best, they are going to just keep producing shitty knock offs until there is no market left for them. In that sense, progress stops because no one will take the effort to build something because someone else can just come along and copy it. So there is no getting left behind. There is just shitty people siphoning off the work of good people and slowing their pace to zero.

How about the adapting is putting sanctions or restrictions on companies that engage in corporate espionage?

I'm really curious what you do for a living, and how you would feel if your work product was just stolen and ripped off and then used to attempt to shut down your living.

>Being the original creator doesn't mean much when others can copy your design and not pay any of the costs associated with developing it in the first place

yes, it doesn't much if you don't know how to monetize it.

>It is pathetic because it treats illegal behavior as if it you are powerless to stop it.

I'm not powerless, I still can make money by employing different strategy and I still have my knowledge.

>and someone gave you advice to stop owning things

I think its still a valid advice.

>progress stops because no one will take the effort to build something because someone else can just come along and copy it.

On the contrary, you always to have be progressing and innovating so that you always one step further than then copier.

What I mean left behind is if one refuse to adapt.

>How about the adapting is putting sanctions or restrictions on companies that engage in corporate espionage

I'm just merely suggesting alternative solution.

≥I'm really curious what you do for a living, and how you would feel if your work product was just stolen and ripped off and then used to attempt to shut down your living

I would be delighted if someone feel my product are important enough or useful enough for some one to copy it.

Like I said before there are strategy for making money that doesn't rely solely on IP

its pathetic because its a disingenuous argument offered to prop up the side of the oppressor. the type of business scenario you describe is an edge case, and you are arguing as if it were the only case.

In Canada, in high school, we learned about Sam Slater. He is affectionately known as the father of the American factory system, but in Britain he was known as 'Slater the traitor', because he built the American factory system using stolen IP. Has nobody here heard of this guy?

Beyond it being 200+ years ago - it was one guy, not state sponsored, who remembered things he saw...versus whole scale theft of documents, designs, blueprints and other IP byproducts. I hate to say it but I can't believe you are making this argument in good faith.

It was actually pretty standard. Even in the mid 19th century when Charles Dickens visited America to a rapturous welcome he pointed out that he didn't earn a penny from American sales of his work. America only started to recognise foreign copyright holders in 1891.

You have a disadvantage too:

You had to spend time and money to create the thing.

The copycats can instead do marketing, convincing others they're the true creator

Without copyright laws

I see amazing naivete whenever this topic comes up.

People need to think of it this way: there are people who will kill you for the cash in your wallet.

So, you are saying to brand yourself but what stops someone from copying your brand and marketing?

Also, not all business can be personalized solutions (would you want a custom car that no mechanic knows how to fix?), furthermore you lose economies of scale, which is a major reason why most companies are viable outside of tech.

> enough cheaters to destroy any pure goodwill based system the instant an attempt is made to scale beyond small communities

Well said

And one's software is accessible to all cheaters across the globe (pretending for a while that everyone has a computer)

Even things like Patreon likely would not work without copyright, as people would just steal the work and republish it on another medium.

See https://www.vice.com/en_us/article/akz4xk/onlyfans-creator-n...

> Open source business models couldn't work without copyright, and there is a minor rebellion underway in OSS against highly permissive licenses due to rampant corporate exploitation (e.g. "SaaSification" and rebranding and commercialization that robs the authors of even credit).

Here is a counter example. Up until a few decades ago, standards organisations like the ISO carefully guarded their standards with copyright law, and funded themselves off the proceeds of selling them. I'm sure they shared you're "standard organisations could not exist with the proceeds" outlook, right up until the IETF came along with there completely free RFC's, and won the networking standards war. One of the reasons ISO lost is it turns out a standard that can be read by everyone is implemented a lot more, and that in turn makes it worth more, which amazingly is actually recognised so people fund the development of more of those standards even though they know their hard work will be given away for free. The W3 works exactly that way, yet is funded by hard nosed corporates.

In some cases, the value of letting every one use the thing you spent millions on developing simply outweighs the cost of charging for it. Today's classic example is AV1, the video Codec. It's competitor, MPEG was does rely on copyright to fund it's development. The initially hidden cost of doing it that way, was if you can force everyone to pay a little bit, why not a little bit more, and perhaps a fair bit more on top of that. It took 20 years or something, but is exactly how it has panned out. And surprise, surprise, a few hard headed capitalist companies (like Microsoft / Facebook and Google) got the shits with this and funded the development of AV1, and gave it away for free.

Yes, the Patreon distribution model could a counter example. But understand that is an attribute of that particular method of distribution. If we removed copyright we may well lose that Patreon, it's unlikely we would lose what is being distributed by it. Music made it's way around the world long before copyright came along, the fashion design industry does perfectly well without copyright to this day.

In fact music is the most glaring example. Music distribution was heavily dependent on copyright for most of my life. Now, that is gone. Almost any song can be downloaded legally for free, and if not trivially pirated for free. The methods of distribution dependent on copyright right has indeed succommed to the petty avarice of humanity as you put it, the avarice being piracy in this case. But notice while that method of distribution has died, music lives on, and methods of distribution that are so cheap piracy isn't worth it risen to replace the old methods.

That's not to say copyright doesn't have it's virtues, but it very doubtful the world would stop if it died tomorrow.

Excluding really obvious things like ethnic cleansing or aggressive war, it's hard to find any policy or practice in the realm of politics that is all good, all bad, perfectly effective, etc. You can almost always find counterexamples or special cases.

I think my overall point is that IP law today is one of the only things that balances the power of pure financial and physical capital. Without IP law, whoever has the easiest access to the most cash wins, period. They can take anything they want and put as much marketing muscle as they want behind it. If the original creators don't have access to as much capital, they lose.

I think it's more true today than it was in the past since digital communication amplifies all these winner-take-all effects.

>People who create need to be able to benefit from that creation.

Only if they need that benefit. If they don't then they don't.

If you have to keep doing that why would you. If I wanted to start a company the smart thing to do would create a company called Orange Computers, steal a modified version of iOS call it iOP and then undercut apple because I didn't have to pay for RnD

You can but you are in mercy of Apple for the product roadmap or future update and you may not understand the product as intimately as Apple. They may also have server side components that would be very difficult to copy.

Why would he care? He makes his money and if, for whatever reason, he can't continue copying Apple, he can simply ditch the company and start a new clone of a different product.

Sure but doesn't mean Apple or whatever company that being copied can't make money too.

Who says I would be at their mercy, for example look at Google and Android. Does it seem like Samsung is waiting for Google's release. Google has the most knowledge of Android yet doesn't sell nearly as may phones.

The only reason google continues this is because they make money from search, but if they had to make money from phones they'd have gone under.

Yes that's the point, google can still have make money despite samsung copying by using different strategy.

Samsung has to use Google search because of the Android licensing agreement, which goes back to IP. If they could, they’d switch off to Bing and get a better revshare.

But they don't make money from the phones.

Thats not the point thats the cautionary tale. Google literally makes money only on its proprietary search and ad business.

Then only because of that can waste money on open source technology that can make no money because its open source.

>But they don't make money from the phones.

Its not all bad, they don't and shouldn't limit themselves by relying on making money on one particular method anyway.

That is utterly irrelevant if I can sell my iClone for $100 with the same functionality as a modern iPhone.

What you have described is Android haha. But in all seriousness Apple is still considered the more "premium" handset.

It's far worse, USA needs their entire economy to stop relying on IP

My belief is the reason the US is suddenly freaking out about China is

a) China is now creating their own IP. Because of course once you outsource manufacturing all the engineering and technical skill quickly follows. The next generation of products doesn't get designed in the US, it gets designed in China.

b) China being flush with cash is now moving into international finance. You can imagine how well that's going over in the financial centers of the indebted west.

once you outsource manufacturing all the engineering and technical skill quickly follows.

This is obvious to any trained Western engineer who knows that manufacturing is a sophisticated engineering discipline in its own right, and once you master it, the other branches of engineering naturally follow.

Western managers however, believed that the Chinese would be content to do just manufacturing forever, and were incapable of doing design. A classic example of how racism bites you in the arse. Having said that none of those managers will suffer, they've already cashed out.

Sounds impressive, then you read the article and realize they surveyed 23 companies in total. I don’t even know what’s 1 in 5 in that context. Four? Five?

> One in five North American-based corporations on the CNBC Global CFO Council says Chinese companies have stolen their intellectual property within the last year. In all, 7 of the 23 companies surveyed say that Chinese firms have stolen from them over the past decade.

I don’t see this as a minimized fact.

The rest of them could be silent due to pressure from CCP. So this problem might be more widespread than companies are reporting.

Pressure from equity holders, which happen to be Chinese logos. Someone shared an example on HN yesterday of Tencent, the largest gaming company. Chinese-owned, and owns major stakes in nearly a dozen of the largest game publishers and storefronts. Everything from Epic Games to Activision Blizzard, from Ubisoft France to the studio behind PUBG and the studio behind League of Legends. Path of Exile, Clash of Clans, Call of Duty Online... a Chinese mega-conglomerate has significant investments in all of them.

For people which don't beliv it, just visit Amazone and see how many "fake" YYY products are sold which do not only have the same functionality (might be legal) but also have the exact same design, copied from designs of companies where you can be pretty sure they do create design patents for all kinds of things.

Worse this look alike fakes are often placed above the original products when you search for the product even when you include the brand name, I mean surely they are cheaper both in price and quality.

Don't get me wrong, I have nothing against cloning the functionality of an product, I just don't like look-alike clones which can be easily mistaken for the original by people not aware of Amazons problems (I have seen it happen a view times with people in my family.)

Possibly some products are not clone but made in same manufacturer and badged by different brand.

They don't say how they picked those 23, so you're right, there could be a sampling bias. But if picked at random, that's kind of frightening.

Honestly are you really surprised? It's been going on for almost 40 years. Any exec saying they're surprised by this is disingenous at best, and lying at worst. If an exec sees a 40 year long pattern and decides to continue working with China, they're either incompetent or deciding that the potential profits are worth it.

To turn around and act surprised by this is like acting surprised that Trump keeps saying inflammatory things.

If true, how is the management of the American companies aware of this theft still doing business there?

How come the Feds will prosecute bribery form foreign officials, but not the CEO or COO allowing corporate property to be stolen?

Cause it's still profitable to them and good business.

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.

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.

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.

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.

There are democracies we could have enriched instead, rather than supporting an authoritarian regime

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.

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?

Aren't CEO's kind of legally obliged to maximise shareholder value, so they have to do the deal with the devil?

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.)

hindsight is great!

A common misconception.

“Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

Why do we see this thing over-and-over-and-over again? It isn't true. It never was. Stop repeating it.

Comforting to some.

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)

> 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.

Disapproval of China is strong across the political spectrum.

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?

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.

My post didn't blame them entirely. They have funds they need to get out of China so they buy property abroad. Having a child who is studying abroad is one of those ways. There's little intention to actually live there, let alone integrate with the community.

The big question is how those funds were obtained. How can locals compete with buyers who can essentially print money? Funny money. Chinese banks are unauditable.

Your last paragraph can't be serious. Are you suggesting somehow China can print dollars? US lands are of course bought with US dollar, which reasonably assumed, only the Fed can print.

They don't print physical dollars, but they can export their Chinese 'wealth' abroad through shady schemes.

As for printing US dollars, North Korea is suspected of doing so: https://en.m.wikipedia.org/wiki/Superdollar

>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.

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.

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).

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.

It's the same in Canada, too.

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.

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.

Same here in Vancouver.

Rich chinese buying real estate in the United Stats has detrimental effect on the poor and the middle class, and our economy in general, leading to ossification.

Any rich person who buy more houses than he can live will create this problem. And there is no incentive for the government to do anything, because the real estate price is their tax, at least for the local government.

Incentive at scale is the problem. Incentives must taper off to make real estate / property investment less inviting the more is owned, this opening it up to more people at the lower levels.

But then will start the games of complicated / opaque business ownership structures allowing for individuals to own lots of real estate through different channels to make it look like it's separate entities.

And there is zero motivation from most of the world's leadership to clean up business ownership structure transparency because so many of them are ... participants.

Land is just an export like any other.

China produces lots of manufactured goods, and sells them to the US. The US produces tons of valuable urban real estate and exports it to China. (Similarly the US produces lots of higher education, and exports it in the form of international students)

Land can be viewed as an export, but it's not like any other.

Economically, there is a fundamental difference between finite, rent-generating resources like land, and value-added goods like Chinese trinkets or international students.

Exporting value-added goods builds the economy. Exporting rent-collecting resources results in significant long-term harm to the economy.

China and Singapore recognize the importance of land due to its inherent scarcity, hence most land is held by the state and foreign ownership banned or discouraged. Frankly, most countries should recognize the importance of keeping land ownership under domestic control. However, this prevents existing wealthy land owners from exiting their holdings easily by selling to the global market instead of just the domestic market, and money speaks loudly in politics.

Sorry, I should have consistently specified "urban" land. Urban land is not finite (cities grow) and is very high value-added.

American policy makers have chosen policies (eg zoning law) that make it easy to produce valuable urban residences. Now they have a massive competitive advantage in high-end residences, so of course they will become exporters.

> Urban land is not finite (cities grow)

“Capable of growth” and “not finite” are not the same thing.

I'm using 'finite' in the same colloquial sense as GP:

> there is a fundamental difference between finite, rent-generating resources like land, and value-added goods

But urban land is finite in every sense in which land is finite, so no matter what sense the poster was using it in regard to land, you are incorrect to say urban land is not finite.

One is a current account, one is a capital account. The US has been running a current account deficit, and the only way to sustain that is to have a capital account surplus, which means foreign investment.

https://en.wikipedia.org/wiki/Capital_account

Just like a business, a country can maintain short term losses by accepting outside investment, or debt. This is not necessarily a bad thing. Almost all companies take on debt and investment to fund their growth.

Also, just like a business, you can’t do this forever. At some point the debt comes due, and/or you end up selling the whole business.

Or to be the world's reserve currency. One of our major exports is dollars. We can keep running some level of deficit so long as that continues. With inflation, the world needs more and more dollars.

Outside investment in businesses is not a bad thing. Outside investment in land is.

> Land is just an export like any other.

i'm in the market for a few TEUs of US land, preferably downtown san francisco. i'll pick it up in Hamburg or Antwerp and would like a house on it.

sarcasm off - just no.

ask the residents of Vancouver, BC what they say about this

> We got cheap Chinese plastic trinkets.

No, what we got was a new robber baron class of ultra-rich billionaires the likes of which haven't been seen since the federal government had to break up Standard Oil, etc... Which has led to extreme wealth inequality and a complete lack of access to _our fucking politics_ for the vast majority of Americans.

We can get more than one thing. I mean, sure, you didn't write anything wrong, but how is that an argument against "We got cheap Chinese plastic trinkets?"

How is this even connected to the flow of the conversation?

Do you respond this way to everyhing? I can just imagine your household.

[Kids running in]: We got a pizza party at school!

[Parent]: No, what we got was a new robber baron class of ultra-rich billionaires the likes of which haven't been seen ...

> how is that an argument against "We got cheap Chinese plastic trinkets?"

It's not, you just read it that way.

> How is this even connected to the flow of the conversation?

One thing (outsourcing our manufacturing -> getting cheap Chinese shit in return) has clearly led to the other (the profits not trickling down through the economy -> our political parties becoming influence peddlers).

For some bizarre reason you seem really offended by what I wrote. I think that your comment says more about you than what you think it says about me. Have a good one.

>> how is that an argument against "We got cheap Chinese plastic trinkets?"

>It's not, you just read it that way.

Your comment literally started by saying "No." In English, that means you disagree with what I wrote. It's followed by a comma, where in a standard English construction you would present your counterargument.

> For some bizarre reason you seem really offended by what I wrote.

I wasn't offended at all. I was a little overwhelmed by the apparent stupidity of the non sequitur response (and I use 'apparent' very deliberately -- it's possible you miswrote what you meant, or I misread it). I think this summarizes my reaction best:

http://quotegeek.com/quotes-from-movies/billy-madison/1122/

https://www.youtube.com/watch?v=ZPXEdJ_Gtx0

Please don't cross into personal attack on HN.

https://news.ycombinator.com/newsguidelines.html

> Didn't we do this to the indigenous people here once ourselves?

Not until they invade and slaughter everyone here. And no that's probably not going to happen. Hilarious that people think this way though.

sigh

This is among the dumbest arguments I've ever read on the Internet. I'm not sure if I'm not just being trolled, but it's like someone arguing Google didn't make Google Reader because they made Google Search. You can do more than one thing.

For reference:

http://newamsterdamhistorycenter.org/education/schaghen.html

Apologies. That's just what I thought of when the comparison with indigenous was brought up.

But that's not the only reason it's a bad comparison. When Manhattan was purchased there was no market. Chinese are buying things at market prices. Which I was taught are fair.

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.

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.

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.

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

If that's true, I find that extremely surprising.

China ended its JV rule for the auto industry in April 2018: 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

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.

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.

Also, most of famous China companies, such as Baidu, Alibaba, Tencent and etc are also controlled by a foreign shell companies as well.

What do you mean?I don't understand

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.

Relevant news coverage in Chinese: https://translate.google.com/translate?sl=auto&tl=en&u=https...

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?

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.

I didn't read the article until now, it reads exactly like what I said, a capital play.

Yet shocking still, it mentions Youth Motors/Qingnian Automobile/青年汽车 as Saleen's neighbor and former plant owner, my god, this is beyond stupid.

Youth Motors made the news last years after its "tech breakthrough of cars powered by water", which in reality is just ineffcient water-to-hygrogen onboard, it became a national joke, it also received huge amounts of government investment and apprently still doing fine right now.

This is the result of local governments not having to pay their debts, it's a feast.

> Thank you, this was an excellent read for myself, an English-speaking American.

Thanks Google Translate. This level of readability was unimaginable in 2015. Back then, the result was nonsense. In recent years however, the quality of Google's Chinese-English translation has significantly improved by better machine-learning models, and works especially well for formally written articles like news stories.

> Are Chinese news stories often this long and detailed?

This is a high-profile financial fraud, even by Chinese standards - whistleblowers, government funds, shareholder hostility, thousands of employees losing jobs, criminal investigation opening, and CEO flee to the USA. Naturally, it receives extensive press coverage.

> 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?

Not necessarily, a large fraud is enough. But a major connection to the government definitely helps to escalate the case to a national political scandal, implies the existence of political corruption (or at least incompetency and stupidity). Unfortunately, it happens from time to time.

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, 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?

> 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.

> 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.

Education is necessary but not sufficiency, because the manufacturing secrets are sometimes intentionally secret, and sometimes simply the result of a process that isn't reproducible.

If you want a programming analogy, imagine if China had all the source code but no binaries. But worse, because there aren't codified programming languages to describe arbitrary industrial processes.

> 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.

Do you know of any country (excluding tiny ones like Singapore) that became advanced without some sort of IP theft?

------

To be clear I am not arguing that the US + China relationship has been good or moral or whatever other positive quality. The US should have instead had better foreign aid policies to help countries develop---none of that IMF liberalization bullshit, but actual useful stuff like:

1. You can tariff us and we won't retaliate

2. We invest in your physical infrastructure

3. We give you IP and shit so your industry can ween itself

However, this very sweet deal comes with commensurately strict conditions:

1. Democracy

2. Unionizaiton

3. Gini coefficient maximum

4. Wage floor

5. Worker governance requirements.

It's really depressing that US foreign policy has been a objectiveless fucking joke entirely captured by the nefarious interests of corporations and bored rich people.

Secrets now? How did anyone ever develop in the first place if secrets were a dead end? Anyway, even if you saddle them with a presumption of stupidity, they can still do the stuff that isn't secret. You can make money on commodities and low quality products in a developing country with low costs. Whereas people in developed countries need to chase after the bleeding edge because they can't survive without the higher margins there.

Why are you discounting very small countries exactly?

No one would take your deal because the government is the problem holding countries back in the first place. China is an ancient civilization, not some new child that was just born and needs to grow up yet. This analogy is overly reductionist. Things that work in silicon valley right now also work everywhere else in the world. It is not magic ground. And I'm no fan of IP, but the system using it is clearly able to work here.

> You can make money on commodities and low quality products in a developing country with low costs.

The factory owner can make a lot of money, but without advancing technology there is no way to raise the standard of living. The PRC's hold on power is absolutely predicated on raising the standard of living.

> Why are you discounting very small countries exactly?

At least in Singapore's case, being a strategically located trade intermediary stopped a lot. But that only works when huge fraction of ones country is so strategically located; this is impossible with a country of decent size.

> No one would take your deal because the government is the problem holding countries back in the first place.

Saying it's (always?) (usually?) the governments fault is capitalist propaganda. Tell that to Prussia, Meiji Japan, or numerous other countries with top down approach that worked. Raising the standard of living imposes demands on all sectors of society. Indeed, it would seem the most useful thing is a cultural memory of development. This possibly explains why Japan and West Germany post war could use that US money so effectively, whereas say, Italy's postwar miracle sputtered out sooner.

My deal is a good one because it's saying "get yourself going as an exporter, but we will provide you with what you need to keep advance your economy and standard of living to the point that poorer countries undercut your exports but domestic demand makes up for it". Making that last step is crucial, as we need educated societies with leisure time to secure budding democracy.

(The US is failing because both we are uneducated and overworked. There is no enough energy left over for the average person to help maintain their corner of the commons.)

> China is an ancient civilization, not some new child that was just born and needs to grow up yet.

I didn't say otherwise? Yes, my plan is patronizing, but international relations from the Hegemon usually are! (I don't know how to solve that problem.)

I don't think it's relevant to my argument, but FWIW Chinese culture is much more divorced from the past than say India's. Presumably this is due to decades of propaganda, and major disruption both due to politics (Cultural Revolution) and the huge economic changes (tons people living far away from and in very different ways than their ancestors).

> Things that work in silicon valley right now also work everywhere else in the world. It is not magic ground.

Well, I'm suspicious how much SV is "working", and not just something that is a) first mover benefit b) flushed with quantitative easing money when EU didn't do that c) The actual big companies survive off rent seaking.

But let's just ignore all that and say SV is a smashing success.

SV succeeds because it is in America, and hierarchy of needs / standard of development -wise benefits and relies on an already technologically advanced society. Asking why SV occurred in America is like asking why factories came to prominence in Britain during the empire: it was historically inevitable.

If you are nation of subsistence farmers, developing some apps is not going to solve your problems.

A parting example: When people gush about Africa skipping land lines and going straight to cellphones, they should realize this isn't all good. Being able to bury wires and pipes is key signal of internal stability, cooperation, and a technology development that will raise the standard of living, and ability to consume, for all.

> And I'm no fan of IP, but the system using it is clearly able to work here.

IP only work alright when all parties have some. That's fine amongst already-developed countries. You can be sure if some Bangladeshi company steal's Huawei stuff China will throw a fit too.

> Saying it's (always?) (usually?) the governments fault is capitalist propaganda.

I gather from your post that you may not have much experience with startups or small business on your own, despite where we are. Because all the things you say are hard or impossible or just not done, are things you see daily. People with no IP working around that of others, which is the same problem for you as a foreign company. People in developing countries starting businesses to trade with the west (i.e. you). People in developing countries looking to what the west needs, gaining the skills via western training (often free), then making lots of money providing it to the west. And yes the killer is governments. The "wealth of nations" is a simple model: skilled laborers use technology to produce more than they need, which they can trade to people with complementary skills. That's the whole system. Borders and cultures and IP are just details to work around. Ultimately there is one big market. The only countries that needs to relive the 19th and 20th centuries in this silly development-process narrative everyone pushes, is places who's govt restricts them to a little local economy foolishly.

Actually, I work for a small tech company, and have to work around other people's undocumented interfaces all the time just like everyone else in this industry.

Your vision sorta works for software-based startups which are not capital intensive and dominated by labor costs. And I've seen first hand how telecommuting overcomes bad immigration law, allowing people in the west to cut the deals that cannot be done remotely on effectively behalf of foreign workers. Bad immigration law is indeed a government-induced problem, and this is one of the best workarounds we have.

Even then, the idea that no good local education is needed and that some body can just get a laptop, read some docs, and start making money is too optimistic.

But the larger problem is I don't think there is enough demand for YC-type stuff to significantly change the standard of living of a state. Consider how much money is dumped into SV startup before it makes money on average, and how few people SV employs due to the productivity of tech. This is not a good recipe for an entire nation.

The classic export goods are material goods; the far simpler unit economics ensure a steady stream of money back home, and the produced goods can (at least in principle) also be consumed domestically to make increasing in the standard of living not import-dependent. No country has gotten rich in the modern era without some of this, and I don't see this trend changing.

> Even then, the idea that no good local education is needed and that some body can just get a laptop, read some docs, and start making money is too optimistic.

This is viewing what I said in an impossibly narrow light. We don't need every man woman and child (of sufficient age to work) to be brimming with such initiative and self-agency. Just a subset of entrepreneurial ones who start businesses which bring these factors together and hire others. This happens on both sides of the ocean. If you can't hire the skills you need you train people. It's far cheaper to do in a country where your competition is the pay they get at home on the farm. This is exactly the situation in India. By the way did you see the thread about what a hassle it is to start a business in India?

Only a fraction of Americans work for large businesses. Generally more work for small businesses, so focusing only on giant scaled-up business models isn't even an accurate picture here.

> Do you know of any country (excluding tiny ones like Singapore) that became advanced without some sort of IP theft?

By the way this question is unfair. Can you name a successful US technology company who has not been accused of IP theft by a competitor?

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

https://archive.is/oLIJl

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.

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.

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.

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.

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."

That's not the kind of "stuff" I'm referring to. Any visit to Japan will reveal rich history full of incredible craftsmanship and attention to detail - engineering, arts, and design.

A similar visit to China - not so much. They have so much ancient history - but their modern story is not as pleasant (for various reasons).

I love China and have traveled across it multiple times. I think it's a beautiful country full of wonderful people - but they just don't have any kind of desire to achieve perfection like the Japanese do. And Japan was able to exit their "goods shunned by international markets" phase very quickly (Tokyo hosted the Olympics and started running the Shinkansen in 1964, less than 20 years after the war).

When will china stop making "cheap stuff"? When will they create their own proprietary tech and license it out to us?

This is not correct. Nearly every iconic traditional Japanese craftsmanship originated in China, and was obsessionally perfected in Japan. The art of Bonsai, Camera Lenses, Sushi, Swordsmanship. You name it.

Japan and South Korea were both known for cheap low quality goods in the 60s/70s. We've seen how that history plays out once they got enough experience to move up the value chain.

Reminds me of the TransRapid story.

https://www.dw.com/en/china-masters-german-train-technology-...

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_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-...

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.

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

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.

> 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.

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...

Should we really be surprised at this?

"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

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.

Looks of claims but no sources. They would be a very interesting read.

Author is an extremely successful businessman and inventor with something like 30+ years of track record running business in US without defrauding anyone.

I will believe him over PRC propaganda any time.

Those business transactions could be easily verified. Had he been such a successful businessmen, why was their initiative failed so miserable as he himself acknowledged when the said fund is provided in full? He quite literally burned 100 million dollars over the course three years without the company being operational sustainable let alone profit, in what scenario would an investor be ok that their actual 100 million us dollar all turning into dust? His own operation here in the US are bankrupted as well, in what sense is that a successful business? or that he is a successful businessmen? All of those are year old material existed on the internet before his wsj piece. You should be easily able to find more. Following the bankruptcy, a company's asset will be liquidated. He also claimed the government filed patents without his consent, while it's the company he worked at filed and owned those patents, it's the company's property from the beginning, that's how it works, surprised? get a job. any financial investor would require how it should be done. Be reminded he have 100 million cash in hand to spend, while 'technology' was valued at 100 million too, with two parties each owning half of the company, which can't be said to be a bad deal.

https://www.autoevolution.com/news/saleen-might-file-for-ban...

BTW. There exsited over hundred start-up EV manufactures (who received investment) in China since around 2014. About 40 of them still exist as of today with the top 5 claiming over 90% of the market share (that does not include traditional car makers expanding their business). It is the most fiercest competition you could ever see and a powerhouse of innovation. Those information should be easily available to you had you know any VC person following this track.

Even if the author is presumably a 'sucessful businessman' by any definition. Ask how many of those failed ventures have a 'sucessful businessman' as their leader.

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.

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

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...

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.

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.

Were you trying to be ironic? You have presented exactly the problem OP is complaining about...

I'm explicitly saying it's not a problem as he claims and should be discussed, and deliberately gave the reasons why it's an interesting discussion.

That's not irony.

Not interested in that discussion? You can collapse the thread using the [-] button.

America stole Britain's intellectual property for a leg up a century or two ago, now a different country is doing it to them.

There's a difference between copying from open source patent database and reverse engineering versus blatantly engaging in industrial espionage, which is a whole another kettle of fish.

Or claiming to be playing by the same set of rules but blatantly violating them.

Patent systems should be considered harmful to nations that enforce or implement them, but that's another story for another day.

I think you need to read up on your history. Here's an easy place to start.

https://www.google.com/search?q=america+stole+britain+intell...

There's plenty of documented evidence that America illegally stole tons of IP, often paid for by the state no less, otherwise known as industrial espionage.

I'm sure they did it to all the European powers of the time too, probably plenty of examples of stolen tech from Spain, the Dutch, etc.

As I'm sure Britain, etc. did to the civilizations more advanced to them in the centuries before too, you can bet there were proclamations about not taking technology out of the cities that had monopolies on them, and were smuggled out illegally or simply attacked for them.

Too much effort? America llegally stole tons of IP, otherwise known as industrial espionage.

What about it? That was over a century ago. It still doesn't make China's industrial espionage ethical or right.

Let's put it this way, if American companies had their way, china would still be low-education hoard of manual labors with no advanced industry. Obvious no country wants to end up in this situation.

Let's promote actually good things like free speech, privacy, etc., and not draconian IP policies that just allow the same rent seeking giant corporations everywhere to fuck us all over everywhere. If we tie everything together, we'll loose all of it.

Why would companies want "low-education hoard of manual labors with no advanced industry"? There would be no way they could buy American products.

Because they can sell them to American consumers at high margin.

Companies have been neglecting the demand side for ages now. Increasing American household debt bought them some time, but isn't a very sustainable resource.

The point is that, with hindsight, we can say that this espionage was a good thing. It allowed the industrial revolution to spread to America, creating a major driver of global prosperity. Perhaps mankind should repeat this highly successful experiment.

From the US point of view, it was freeing knowledge from the hands of backwards aristocrats, who for too long had lived on the backs of the common classes. The US felt it needed to be on par with Europe or risk having itself reconquered.

From the Chinese point of view, it is freeing knowledge from imperialist powers that previously conspired to divide its country, drug its populace with opium, set up rape camps for the mere “comfort” their soldiers. It feels that it must be on par with these counties or risk having atrocity after atrocity revisited upon it.

No one feels they are evil, and even when you “cheat” it’s always because you were cheated first.

And America's ever increasing IP and copyright laws conveniently only last a century, don't they. Funny that, strange coincidence.

I'm not sure what you mean by 'ehtical or right'. It really depends on your perspective, and probably the place you were born.

People are dying that could be saved, right now, today, because of America's IP laws.

How is that right or ethical?

You could argue that without those IP laws, more would die in the future. But with how fast tech moves today, I think even a 10 year copyright/5 year patent length is perhaps too long to really justify that.

> What about it? That was over a century ago.

...and more than a century before, the UK successfully sent a spy to China to smuggle out tea seedlings (which was illegal in China). It's the circle of (IP) life: upstart plays fast & loose with IP laws until they grow into the incumbent, then they get really conservative on IP laws to stay on top. In a hundred years, China will be just as rigid as the US is now.

Pointing out patterns is intellectually interesting by itself - I think those who say "It's different this time: we are civilized now" are the ones who are being less than honest with themselves; the laws and morals didn't change in 100 years, only the side certain countries occupy on the upstart/incumbent fence flipped.

> As I'm sure Britain, etc. did to the civilizations more advanced to them in the centuries before too

From China, for instance. Porcelain manufacturing and some other things.

Except they aren't saying "no", they're trying to have it both ways by violating both the spirit and letter of their agreements. The subtitle of the story points out that the Chinese were the ones doing the actual patent filing in this case.

And this story of western development as some kind of capital-hoarding process is completely off. A country is developed and wealthy if and only if it has skilled labor producing so much wealth constantly. In the US it was $20T last year, and it will be another $20T the next year (ok maybe a bit less this year). You could be nothing but hired guns producing for contract, and become the richest country in the world. I'm no fan of IP, but its a sideshow here. And if anything I'd say it's far worse for developed countries than developing ones.

Or there are agents from those places with paid motives to post those things. I've noticed whenever a China topic comes up, there are a suspicious number of apologist/whataboutist comments beyond even the normal HN-kneejerk-contrarianism.

Wumao.

Thanks, I think I've noticed that me too, and it's nice to see that others are noticing the same patterns.

Lots of CCP critical comments getting downtown, and the discussions slightly derailed

Didn't know about that word before, only "troll farms".

This breaks the site guidelines. Please don't post like this unless you have evidence. Other users disagreeing with you does not count as evidence.

See https://news.ycombinator.com/item?id=24097185 for a recent explanation, and these links for plenty more:

https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...

https://hn.algolia.com/?sort=byDate&type=comment&dateRange=a...

This breaks the site guidelines. Please don't post like this unless you have evidence. Other users disagreeing with you does not count as evidence.

See https://news.ycombinator.com/item?id=24097185 for a recent explanation, and these links for plenty more:

https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...

https://hn.algolia.com/?sort=byDate&type=comment&dateRange=a...

> I just can't understand why when it comes to geopolitics, HN just can't keep the discussion related to the submission?

It's not HN, it's human nature, that's why whataboutism is universal. In most cases whataboutism is a nearly uncontrollable impulse, it's a mental sensation the person can barely contain. Whataboutism is used either to relieve anguish that the person feels, or to outlet hatred/rage. They're compelled by the stress they feel to outlet it. In the case of anguish, it's caused when the subject of a negative story - eg China - is being hit, the person desperately needs to redirect fire off of it, because it feels personal, they feel actual mental anguish from the story and need to make it stop. One way to lighten that anguish is to spread it around, try to normalize the negative (by trying to show that other countries are guilty too). Whataboutism out of hatred/dislike is a case where the person literally hates the redirect subject - eg the US - and looks for any excuse at any time to focus their rage onto it; in that case it's not about the focus subject, it's primarily about the redirect subject (the initial focus subject is merely the opportunity provider).

I don't understand how this is surprising or why this is a bad thing. Comparing a country's actions to ethical ideals is great, but it is subjective and does not achieve much. The only realistic benchmark is to compare one country to another.

There is also the aspect of hypocrisy that leaves a bad taste. Putin criticizing the lack of black rights in the US is just as hypocritical as the US claiming to take military action to promote democracy.

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.

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.

Because before giving lessons to others you should be irreproachable.

What would you think of Dijkstra if you suddenly discovered that he still wrote goto infested spaghetti code after his notorious "Go To Statement Considered Harmful" paper ?

So yes we should criticize China as the bad actor that it is, but let's not forget that the western world is hardly an example (a good one I mean ;)

Underneath any high-level programming language is a layer of goto-infested spaghetti code. Dijkstra lost the stomach for low level optimization and convinced generations of programmers that easy is better than efficient.

I think you missed my point : it was about hypocrisy not about gotos ;)

Anyway in my usecase, easy is better than efficient : I'm in my 12th year of coding desktop and backend apps in C# and my first time having to rethink my code because it was too slow was only last year where I had to use dictionaries instead of Linq for a project that manipulates a lot of data (yes using dictionaries instead of Linq is the extent of my "optimization" and it's enough).

In those 12 years I never thought "if only I had a lower level, more efficient language than C#" (quite the opposite in fact).

So IMO it all depends on what you do : of course if your code is deployed to something less powerful than an Arduino I understand that efficiency is paramount !

Because there's context around these topics beyond just China did something bad or the US did something bad, which is that China and the US are locked in a competition. In a competition, if you hobble yourself and your opponent doesn't, you lose. Not comparing the actions of both sides and only focusing on the actions of one is like judging a race by scrutinizing every detail of one racer while ignoring the other one doping himself either now or in the past and getting a major lead. It offends the fundamental human instinct for fairness.

I'm reminded of this article that was posted a while ago: https://www.theatlantic.com/magazine/archive/2013/11/why-we-...

TLDR: Everyone has an innate sense of justice and fairness, which drives us to engage in cooperative behavior and punish self-serving behavior and allows us to cooperate. However, we also tend to weigh our own good behavior more heavily and downplay our bad behaviors, and we do the opposite for others. This is necessary for us to push for harder bargains when cooperation is over and it's time to split the spoils.

Claiming whataboutism seems like a major case of downplaying bad and unfair behavior when it is pointed out by brushing it off as nonexistent or not relevant to the debate over spoils.

I believe there can be different intentions of invoking whataboutism, and under certain context, it can be a perfectly valid informal argument in a debate. The intentions of invoking whataboutism can be

1. Denial of criticism or shifting blame. "Because you had wrongdongs of a similar nature, your criticism of my wrongdoing is null and void." This is the original form of whataboutism, and it's not a legitimate argument.

2. Attack the opponent's double-standard and its authority on being the judge. "Because you had wrongdongs of a similar nature, you are not quantified for judging my wrongdoing." Often the discussion degrades to case (1) and becomes invalid. However, if the existence of wrongdoing is not denied, it can be valid in some cases.

3. Showing additional background of a problem. "Yes, I have wrongdoings. However, you have wrongdoings too, and social studies finds this type of wrongdings is a global problem and widespread in the modern world." This discussion argues the given problem must be examined at a broader context, not as an isolated evil by a single actor. This is a valid argument.

4. Treating the original problem from a different perspective. "If I have wrongdoings and you have wrongdoings, then can it be a possibility that (a) it isn't wrongdoing to begin with, or (b) it's inevitable, or (c) that it's an necessary evil?" Depending on the motivation of the speaker, it can be the same as (1) for denying criticism, but in a honest discussion, this can be valid too.

The "wrongdoings" can be mass surveillance, war crimes, human right abuses, IP theif, and so on. For example, here are some applications of valid "whataboutism" argument. Using mass surveillance as an example.

- "The NSA argues that Government X's foreign surveillance is a threat to the privacy and freedom of Americans. But what about the NSA?! As you see, this is not a real problem but only an excuse for discrediting others politically, and Government X's doing totally fine."

This is an invalid argument and should be frowned upon.

- "The NSA argues that foreign surveillance is a threat to the privacy and freedom of Americans. While it's true, what about the NSA's domestic surveillance that was never really reformed? Thus, the problem of the privacy and freedom of Americans can never be resolved unless both harmful foreign and domestic surveillance have been removed or reformed. If the NSA is only focusing on the first issue, then it's not acting as a fair judge on this problem, and there are reasons to believe the NSA is only acting for its self-interest, not the actual problem."

This can be a valid argument.

- "The NSA argues that foreign surveillance is a threat to the privacy and freedom of Americans. While it's true, what about the NSA's domestic surveillance that was never really reformed? The surveillance capabilities of the NSA is an order of magnitude greater than Foreign Nation X, hence, the threat from the NSA is greater and should be an issue of higher priority."

This is valid argument. Whether the facts and its conclusion is true or false, can be subjected to further debates.

- "The NSA argues that foreign surveillance is a threat to the privacy and freedom of Americans. While it's true, what about the NSA's domestic surveillance that was never really reformed? In addition, the clear evidence showed most liberal democracy governments have unchecked mass surveillance powers on citizens. Hence, it's only a symptom and ultimately, the real problem is ..."

    - Liberals: "Unchecked growth of power by secret services authorized by the President, and fueled by its war on terror."

    - Libertarian: "Ever-expanding state power in the modern age. "

    - Tech-critics: "Dangers enabled by omnipresence of computing and the Internet."

    - Infosec researchers: "Disregard of security and privacy in system designs."

These are obviously valid arguments.

-- In conclusion, under certain context, whataboutism can be a perfectly valid informal argument in a debate.

> US/ WESTERN COUNTRIES did this before too and therefore no better than China

I honestly believe this can possibly be a valid argument from some perspectives. But I don't want to start any argument, as I'm not interested in this particular debate.

> Somehow US/western countries have to enter the discussion as a bad benchmark...

In some cases, they are good benchmarks. For example, the legal protection of free speech in the United States has flaws, but arguably it's still one of the best in existence globally. Unfortunately, in other cases, they are a bad benchmark, and it's extremely problematic. For example, the government of the USA historically have a record of conduct illegal experiments on human subjects without their knowledge or consent, tries to persuade minority leaders to commit suicide, blatantly lies to Congress about the scope of their illegal programs, and works to overthrow democratically elected governments of other sovereign nations. Then why should a citizen of any nation-state have faith on the United States to implement the Universal Declaration of Human Rights?

The argument above is invalid if I'm using it to shift blame. But it can be valid if it's meant to point out an inadequacy of the US Government or relying superpowers to ensure justice by enforcing International Laws. A hypothetical argument can follow it: If LessWrong's "friendly AI" is feasible and AGI is only 30 years away, it should take control of the world, at least on human rights issues, as soon as possible. Unfortunately, the scenario is unlikely.

Stealing from a thief is still wrong, but a thief complaining about someone stealing their stuff loses a bit of punch.

How does preempting a hypothetical add to the conversation?

> Not really off tangent,

> I just can't understand why... HN just can't keep the discussion related to the submission?

I personally enjoy meta conversations but I hope OP realizes the irony of this comment.

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.

Article is behind paywall, is there alternative link?

It seems they activate the paywall after a post gets traction. Because there was none before.

Easy bypass is to run it through a url shortener, and then outline.com.

Works for NYT as well, and most others.

NYT can be bypassed using Reader View, but the WSJ seems to be able to disable it.

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

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.)

I knew that they were scummy but this is quite extreme.

Thankfully it is easy to bypass with archive.org (or archive.is)

https://outline.com/3kdJyy

That seems to be missing content. :(

What content is it missing.

It has the entire article text and hyperlinks that I can tell.

???

Let's start with the very first paragraph from the original:

  President Trump said last month that talks for a phase 2
  trade agreement with China were on the back burner. If
  they ...

Let's look at the very first paragraph from the "Outline" version:

  I would bring experience, design, engineering and related
  technologies developed over my 40-year career in the
  automotive industry building race cars and ...

Those are clearly different, which means the Outline one is missing content and not fit for purpose.

I didn't bother checking for further differences. There may or may not be any, none of which really matters given the Outline one is incomplete.

Outline tends to attempt to cut out the first portion summary text.

It could be a formatting issue with bitly. Tinyurl may work better in some instances.

Ultimately it does the job tasked, to get you the text locked inside the paywall.

Clearly it's not capturing the entire article text. :(

Personally, I consider that to be a fundamental flaw. eg "Not fit for purpose.

https://archive.vn/oLIJl

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.

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

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.

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?

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.

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.

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.

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