Previous posts in this discussion:
PostA Defense of Trump? Er, No (Tor Guimaraes, USA, 08/25/19 6:22 am)
John Eipper commented: "WAIS is all about a balance of views, but when was the last time we posted a positive take on Trump? Is anyone willing to try?"
In the beginning I believed Trump might be a ray of hope for America. His personality and rhetoric were exciting, he was a billionaire never mind how he got there, he wanted to reduce NATO, partner with Russia and make trade with China more fair. I thought these are good ideas and wished him success in all of them.
As time progressed, reality became increasingly obvious. Trump clearly fooled me (that's on me); he actually is a very poorly educated 13 year-old, wiling to lie at will and apparently not caring when that becomes obvious. So much for personality at a time when the political competition is also comprised mostly of political prostitutes and a President receiving fellatio in the Oval Office.
Probably as a result from his very poor education, much of the blame for the unfolding bad news for the American people comes from his poor selections of staff and advisors. Again this might be par for the course since President Obama, who supposedly is a smart person, kept many of the officials who were part of the 2009 financial crisis which brought the world to its knees.
In a way Trump is a man with some good ideas which have been disastrously implemented. To fix the China trade issues, a tariff war is probably the worst option. To reshape the NATO alliance, tariff wars and personal animosity against European leaders also seem counterproductive. But, for some unexplained reason, Trump loves Putin in many ways.
I am deeply sorry but can not see anything positive about lack of willingness to learn, irrational racism, xenophobia, divisive and insulting rhetoric, complete blindness about climate change and the plight of the vulnerable segments of the population.
JE comments: Tor, how would you address China's dishonest dealing on trade and intellectual property?
Transferring Technology to China: Is This "Theft"?
(Patrick Mears, -Germany
08/26/19 3:54 AM)
I would like to comment on John E's question concerning China's alleged "dishonest dealings on. . .intellectual property" in his comments on Tor Guimaraes' recent post titled "A Defense of Trump?"
President Trump is leading the pack alleging that China has "stolen" intellectual property from foreign investors who have established subsidiaries in the People's Republic of China and is demanding that this practice stop.
Admittedly, I am not 100% acquainted with all of these instances where IP has been transferred to Chinese entities, particularly to Chinese joint-venture partners of foreign investors in areas other than the motor vehicle industry. However, I have done quite a bit of reading on the creation of motor vehicle manufacturing affiliates in the PRC by Western automakers, e.g., Michael Dunne's American Wheels, Chinese Roads: The Story of General Motors in China (2011), Jim Mann's Beijing Jeep: A Case Study of Western Business in China (1989), and Martin Posth's engaging 1000 Days in Shanghai: The Volkswagen Story--The First Chinese-German Car Factory (2008). I am not sure that this characterization reflects reality.
I understand that the quid-pro-quo insisted upon by the Chinese government for the entry of Western automakers into the Chinese market after "The Gang of Four" was dispatched was that these auto assemblers would agree to enter into joint ventures with Chinese partners, typically state-owned enterprises (SOEs), on a 50-50 basis, and that the non-Chinese joint venturers would be required to agree to share their technologies with those SOEs. This was the price to be paid by Western automakers for entering what has since become the world's largest market for the sale of motor vehicles, and the profits accruing to these foreign automakers have been handsome indeed.
Furthermore, it seems to me that these Chinese SOEs would likely have good reason to have access to these technologies since they might very well be determined to be liable for any damages caused to persons or property resulting from improper design and/or engineering of these vehicles. Some of the Western automakers entering the China market early took pains to avoid these transfers of technology (e.g., Volkswagen, by sending to its newly established Shanghai plant only "complete knock-down kits" from Germany to China that required only assembly in Shanghai), but as time progressed, this strategy became infeasible and these technologies were shared with the Western automakers' Chinese counterparts.
in any event, I would be interested in learning from other WAISers if they believe that there is more to this story than what I have been led to believe through my research, which is admittedly some years old.
JE comments: We tend to think of "intellectual property theft" in the most blatant terms, such as reverse-engineering a gizmo or pirating films/music. Patrick Mears reminds us that the Chinese situation is not so simple. How do we view joint ventures entered into freely by Western corporations? Is it theft when you willingly hand something over?
Tor Guimaraes takes up the China question, next.
- How Should the West Deal with China's Unfair Trade? (Tor Guimaraes, USA 08/26/19 4:11 AM)
Since I wrote that "to fix the China trade issues, a tariff war is probably the worst option," John E sucker-punched me with a very difficult question: "Tor, how would you address China's dishonest dealing on trade and intellectual property?"
First, where I am coming from: For the last several years, whenever applicable I expressed in this Forum my dismay that the US government allowed our corporations to make China our cheap goods manufacturing center. Dangling their potentially juicy markets, Chinese organizations not only employed their poor people but intelligently learned how to use Western technology and know how to rise to unimaginable levels of scientific knowledge, technology, and financial success. They made many big mistakes, but strategically China is out of the poverty box. Having a central government has created many huge problems for China like the enormous waste in roads/bridges to nowhere and empty/unfinished cities. However, undeniably the same central government transformed China by huge investments in infrastructure (energy, water management, transportation, communication, agriculture/food production, etc.). Well, all this is water under the bridge and the world has to live with it.
Under the WTO China's old status as a developing country gave it a good excuse for borrowing technology and know-how as part of doing business with foreign companies. But now China is looking more like a developed nation even though by some measure it is still a poor country. More important, it needs to be assertively confronted when it engages in stealing intellectual property, bullying small neighbors with unreasonable territorial claims, and any unfair trade practices based on the WTO agreement. In other words, take China to court first, make it look like a crook in the eyes of the world. If China insists, take directly related proportional punitive measures, including stealing some of their technology (they are ahead in some areas like 5G and possibly AI).
Whatever we do, an all-out trade war is likely to be a bad idea for many reasons: It is going to be a financial bloodbath for consumers and jobs. Even if we hurt China badly, which we will, we might lose more even though Trump may blame someone else for the results or he will subsidize his constituents (he already promised $28B to the big farmers). Because of their central government, China can react and implement changes much quicker than our chaotic government. This trade war may force China to finally reduce poverty in the countryside by shifting from exports to developing internal demand. On the other hand, the US economy is not as strong as our talking heads are saying, all our infrastructure is going rotten with no plans for necessary investments, our tax base is shrinking, the corporations don't know what to do with all the cheap cash except share buybacks, mergers and acquisitions, the US deficit is exploding, our old allies are getting pissed at us, our old enemies are laughing at us and making alliances (even Iran now is feeling much safer by cozying up to Russia and China). Strategically, all these bad developments plus a wild teenager in the White House, make me even more worried than before. It seems like a never-ending increasingly worsening nightmare. Even the price of gold is telling us the world is in trouble.
Please, someone give me some truthful good news.
JE comments: Take 'em to court? Hasn't this been tried already? And conversely, China is suing the US before the WTO because of the punitive tariffs. It's a PR war at this point, but who is the audience? Some vaguely defined "world opinion"?
(I don't call it a sucker-punch, Tor. I prefer to think of it as "sparking further discussion"!)
- How Should the West Deal with China's Unfair Trade? (Tor Guimaraes, USA 08/26/19 4:11 AM)