China Watchers, Watch This
For at least a decade the United States has been beating on China to change its duplicitous stance on intellectual property rights. We’ve had only modest success. Now some Chinese content producers are suing other Chinese companies for copyright infringement. Now maybe we’ll see some action.
‘Content’ in various forms is the United States’ most valuable export – not cars and pork bellies, but content -- movies and CDs, software and innovative designs. America needs to protect those products from piracy. While spokesmen for these industries regularly exaggerate their IPR problems, industry and the government are right to pressure the PRC to protect intellectual property. Promoting and protecting content has to be at the center of American trade policies.
But successes have been hard to come by. Huge proportions of U.S. content sold in Chinese markets are pirated. The PRC government has found it hard to get excited about prosecuting local pirates against foreign content providers, even though American entertainers like Quincy Jones, as well as American officials like Treasury Secretary John Snow pursue good cop – bad cop efforts to get them to do the right thing.
Well, the Chinese Communist Party may now be ready to do the right thing. But not mainly because foreigners have been browbeating them lo’ these many years. More importantly, conditions on the ground in China may have changed enough recently to create a local commercial coalition that wants what we want. Not just in response to our pressure, mind you, but because their own domestic interests dictate that they do something to protect their own assets.
Howard French reports in Saturday’s New York Times that the Beijing News is suing a popular Internet site, Tom.com, for 400,000 bucks for violating its IPR and ripping off more that 25,000 articles and photos since 2003.
Whoever actually wins the case, this is a telling development. It suggests that the class of Chinese with material interests in reaping the benefits from content that they produce locally is growing fast and growing more powerful. Arguments in favor of IPR protection sound more convincing when delivered in Cantonese or Mandarin than in New Yorkese or the language of Hollywood. This shift, as both cause and effect, occurs just as President Hu and other senior officials are delivering the new high principal of today’s Chinese Communist Party -- China must become more “innovative.”
There is a broader lesson. Success in diplomacy, international trade or security hinges on knowing when these kinds of tectonic shifts are possible inside other countries, and then pressing for change. But knowing when these pivotal moments arrive requires listening attentively, not just talking loudly. This holds for democracy as it does for IPR. Should we throw down the gauntlet of democracy-building in Somalia, where the terrain is barren and inauspicious? No, not as our top priority. Should we press for greater democracy and greater commitments to open markets and IPR in China? Absolutely. And we should remember that local Chinese firms like Sohu.com and Alibaba are much more likely to change laws and business practices for the better than even the most well-meaning, and vocal, foreign firms.














This is good news. China is the world's biggest technology thief. Some of the cars they make are wholesale ripoffs, right down to the smallest components. If they don't do something the bloom will be off the Chinese rose in the near future. The slack Western economies have afforded them will tighten up and more accountability will be expected of China.
January 8, 2007 2:56 PM | Reply | Permalink
The effect of world opinion usually grows in accordance with the engagement of a criticized country with that wider world--America being currently an exception.
The universal condemnation of suppression of political dissent behind the Iron Curtain had a major effect, eventually, by stiffening the spines of dissenters, and weakening that of the power structure.
January 9, 2007 5:48 AM | Reply | Permalink
China's record on intellectual property protection is hardly the worst in the world. Thailand has for years been just as big an abuser, if not worse, and the list of other offending countries is very very long. It is an old resistant myth that the Chinese reverse engineer everything and are the world's foremost copiers. Fact is, Chinese cars are made together with Hyandai, Toyota, Mazda, GM, Daimler, Ford, etc., etc., in carefully crafted agreements. Delphi has 15 factories in China where they develop NEW auto parts with Chinese designers and design firms - so where is the rip off there?
The intellectual property debate with China is all we have left now for leverage on Beijing which is a pretty sorry state. "Human rights" is dead as an issue thanks to the Bush administration's actions and the strength of China's economy and financial leverage on us. And is this really concern of national policy or national security? How does Quincy Jones's royalties and the profit margin of Disney affect our nation ultimately? Does Bill Gates push back on this? No, he's over in China all the time watching Chinese copy his software and selling them gaming platforms.
"Where the bulk of the population cannot read, true democracy is impossible." -- Bertrand Russell
January 9, 2007 9:16 AM | Reply | Permalink
Some intellectual property protection is good for innovation and development. Some is protectionism--bad for innovation and development. The US had a solid position as the world leader in software for decades without software patents, which didn't exist until the mid-80's. Software patents have hurt the field.
Meanwhile, software has always been protected by copyright. And copyright seems to have helped the field.
In the US, though we say we're in favor of free market, there is a lot of protectionism in some areas--medicine, some fields of patents, Microsoft getting away with corporate murder. I don't see our pendulum swinging back to the center any time soon.
In China, they are under-protected, and swinging toward the center. They could, at least for a period of time, have an IP system that fosters innovation more than the US system does. That's not to say they will, but it seems to be accessible from their current position.
Elisha Gray and Alexander Bell invented the telephone within hours of each other. Under Communism, they would both have had to work in the state's telephone factory. Under the patent system, Bell escaped this fate, but Gray was not allowed to profit from his work. Might there be a system under which they both would have been able to harvest the fruit of their labor?
Under copyright, independent developers are each allowed to use their work. Copyright is difficult to apply to Industrial Revolution technologies, but more easily applied to Information Age content. If China develops strong copyright protection while converting weak patent protection into limited patent protection, they may be able to benefit rapidly from a rich pool of internal and external innovation, while we in the US are still paying lawyers to work out cross-licensing deals.
If copyright is fundamentally better than patent for information-age content, then screaming "Theft!" or "Piracy!" will not save us. Being willing to fight protectionism in all its forms might save us.
Chris
January 9, 2007 11:10 AM | Reply | Permalink
You reminded me of an Asia Times article I read last week about pirated DVD's, "US movie giants swim with China's sharks" The last two paragraphs and especially the last sentence were particularly memorable.
I don't have any doubts about which choice will be made.
January 10, 2007 8:20 AM | Reply | Permalink