China and Intellectual Property Rights

If you’re wondering why the headline of this DefenseNews article is “Russia Admits China Illegally Copied Its Fighter,” it’s because everyone knows China reverse engineers indigenous products from imported models, but the Chinese market has so much pull that people sell them the hardware along with technology transfers anyway. Then the trick becomes how to get the Chinese to respect the contract without making them lose face.

A guy I met here in Paris who works for Alstom, the French train manufacturer, was telling me how they started seeing their trains show up in South America under Chinese brand names. Apparently the Chinese are pretty good about owning up when they get busted, so long as getting busted doesn’t involve public humiliation. But this is considered part of doing business with China, kind of like depositing mountains of cash into one of Prince Bandar’s Swiss bank acocunts is considered part of doing business with Saudi Arabia.