Guest post by Courtney Gordner
There are many things at the heart of ongoing complaints about China and intellectual property theft. As a long and often contentious history between the United States and China exists, some of the negative perceptions of Chinese and Western businesses can in fact be blamed on a combination of xenophobia and implied racism.
Are there legitimate concerns regarding IP theft in China? Absolutely. However, there are also reasons why the problem is not as central to China as some Western onlookers may think.
Plenty of Top Legitimate Exports Come From China
Many legitimate businesses put out quality products that Chinese and non-Chinese consumers are happy to spend money on. Some of China’s top exports include electronics and machinery that are used abroad.
The country is a source of quality high-tech computer equipment. This equipment could be used by a company that offers VoIP services, services that ensure that your telephone system is being used optimally. It also might be used by a restaurant specializing in online pizza orders.
It’s actually amazing to consider how many top exports from China are interwoven into various business ventures around the world. And it’s disheartening that this is brushed aside in favor of negative and derogatory assumptions.
“Knockoffs” Are a Global Problem
Have you ever heard of Han Van Meegeren? During the 1930s and 40s, this Dutch forger made a fortune by passing off his own work as that of famous artists. He made upwards of $30 million, which inflation would drive into nine figure territory if he were successful today. Somehow he was able to convince men who considered themselves experts in art that paints that were merely months old were in fact centuries old originals.
Fraudulent behavior, a desire to separate hard working people and their money, is a problem that authorities have been battling for many years and continue to fight today. In China, there are avenues for enforcing one’s intellectual property rights just as these laws are found in many different countries as a means of fighting back against various perpetrators of fraud.
China vs. United States: Recent Accusations and Implications
There exists a great deal of mistrust in Chinese business ventures on the part of top American companies. Many of these fears are created by problems involving threats to their intellectual properties.
One report blames China for a $300 billion loss in revenue each year. There are calls for the United States to get tough with China over IP infringement.
The problem is that the United States may have to get in line—behind other Chinese businesses. Despite what some Western businesses may think, more often than not the problem of intellectual property theft in China affects ALL businesses.
The reason that the United States and China may have issues working together to solve this problem is that both governments have fundamentally differing approaches to IP theft.
Knockoffs vs. Legitimate Business Ventures: Which Is More Profitable?
Despite ongoing problems with IP theft and accusations about “knockoffs,” many Chinese consumers are smart enough to know and prefer the “real deal”.
It may be shocking to the sensibilities of Americans, who are always on the lookout for a bargain, but many Chinese customers aim for quality, high-end goods. And they go directly to the source to get these items.
For legitimate businesses looking to capitalize on the high-end trend, dealing in knockoffs just isn’t worth the trouble. It’s better to sell high-end items and make more than to sell fake items and make considerably less.
As you can imagine, such behavior would make it impossible for a business to become certified under the ISO 9001 revision or any other respectable international standard.
If a business expects to thrive on the global market, it’s best to stay on the level.
Some IP theft can be profitable, but eventually it will land the perpetrators into a world of trouble, either in the United States or in China.
There continues to be a great deal of mistrust between the United States and China over IP-related issues. Also, there is an unfair assumption that the IP theft that occurs represents a greater number of Chinese businesses and entrepreneurs than are realistic. Many of the exports emerging from China are legitimate and worth far more than the knockoff industry.
It should also not be forgotten that more often than not the biggest victims of IP theft in China aren’t Western businesses, but Chinese businesses themselves.