The Chinese theft of Intellectual Property…

Earlier this week, we outlined China’s 9 Principles for Replacing America as the Global Superpower

  1. Don’t provoke a powerful adversary.
  2. Turn your opponent’s house on itself.
  3. Be patient to achieve victory.
  4. Steal your opponent’s ideas and technology.
  5. Target an enemy’s weak points rather than relying on an accumulation of brute strength.
  6. Beware political states that have a dominant influence or authority over others.
  7. Deceive others into doing your bidding for you.
  8. Establish and employ metrics for measuring your status relative to other potential challengers.
  9. Maintain a deeply ingrained sense of paranoia.

Excerpted from The Hundred Year Marathon: China’s Strategy to Replace America as the Global Superpower by Michael Pillsbury.

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Today, let’s focus on #4 — Steal your opponent’s ideas and technology — and drill down on … the Chinese theft of intellectual property..

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According to CNBC: “One of the major sticking points has been China’s disregard of intellectual property protections and claims dating back years about rampant Chinese theft of corporate trade secrets.

The allegations are not hyperbole.”

In its 2017 report, the Commission on the Theft of American Intellectual Property estimated that the cost to the U.S. economy from counterfeit goods, pirated software, and the theft of trade secrets could be as high as $600 billion annually.

“the world’s principal IP infringer” … China. Source

“China has sought to acquire US technology by any means, licit or illicit” including:

  • Espionage that is sometimes enabled by governmental “security reviews”
  • Theft of Intellectual Property (including trade secrets)
  • Forced technology transfers (especially from technology companies)
  • Mandatory joint ventures (as a condition for doing business in China)

According to the Columbia Business Law Review:

The Trump administration has generally adopted a more antagonistic posture toward China (than the Obama Administration), both tonally and substantively.

Throughout his campaign, then-candidate Trump lambasted China’s trade relationship with the U.S., identifying intellectual property theft as a key issue.

In office, President Trump has acted upon that rhetoric, citing trade secret theft as one reason for his continuing trade war with China and the $200 billion in tariffs he slapped on the country.

The stakes are high … and China has resisted enforcement mechanisms that would stop (or at least impede) intellectual property theft.

If they did … they’d be violating Pillsbury’s 4th principle … a mainstay of China’s economic progress.

It’s as simple as that.

So, the trade war continues … at increasingly higher stakes for both sides.

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