April 28th, 2009
China and IP: the piper will get paid
As everyone knows, and as our quarterly supply chain risk data proves, China is a den of thieves as far as IP is concerned. Today’s New York Times has a lengthy and prominent article on brand piracy in Shenzhen’s cell phone industry. The practice of making and selling black market phones is so rampant that 20% of all those sold in China are thought to be knockoffs. The explanation of how this happens is candidly offered by a sales manager at Triquint Semiconductor who makes components for the industry:
“Five years ago there were no counterfeit phones. You needed a design house. You needed software guys. You needed hardware design. But now a company with five guys can do it. Within 100 miles of here you can find all your suppliers.”
What has bugged me is the audacity and criminality of the Government who happily looks the other way as expensively developed technologies, industrial designs, and brands are flat out stolen. One Vassar professor is even quoted in the story spinning this scandal as a virtue:
“Chinese grass-roots companies are actually very innovative. Its not so much technology as how they form supply chains and how rapidly they react to new trends”. Charming - reminds me of Napster as seen through the eyes of the music industry, or the go-getters out cutting down teak trees in Malaysia. There is a reason we call it piracy.
But rest easy, poetic justice is coming to the rescue. Remember the $1Trillion or so of dollar denominated debt held by the Chinese? Well, after we print the trillion extra dollars it will take to undo our credit-sparked economic crisis those debts will be alot less expensive (to us) in real terms. Think of it as a $500 billion bill being stuck on Beijing to pay us back for all the money that should have been made by Microsoft, Apple, Paramount, and Nike for their IP.
The Piper will be paid.
