In China, nothing happens without communist party blessing. Their foot soldiers prowl city streets like mafia lieutenants keeping track of what is going on. Set up a noodle stand on the corner and the police come a callin’. “It’s illegal to sell here you know,” Chinese cop says.Slow nod of the head from street hawker.
“How do we make this right?”
Stoop shouldered small business owner hands over a wad of bills, and is open for business. This is true of legal and illegal businesses alike. If you want to sell in China, there is a communist party boss you have got to pay off.
Now let me ask you, if a foot soldier knows which street peddlers have a license and which don’t then surely somebody knows the same about monstrous retail stores. Especially one as big as Apple.
As a matter of fact, when an Apple retail store opens in China it’s nation-wide news. CCTV, the media arm of the communist party will do a piece on it and a bevvy of foreign media too. The communist party definitely knows who has set up shop.
Oh yeah, you may have recognized the name of this town – Yongchuan. I wrote about it in the article Fake Hooters Restaurant Spotted in Yongchuan China.
Yongchuan not only has at least one fake Apple store, but a fake Hooters as well. Hooters, for one, was not amused. They were contacted about that knockoff and they were plenty upset. I don’t know what action they took, if any. If they did it had no effect, however, as the Hooters was still open as of November.
Proximity to Communist Party Headquarters
Even more telling is that both the fake Apple and Hooters operate within blocks of the communist party headquarters. In fact, if one stands in front of that hallowed building they can actually see the faux Apple merely 600 yards away.
As for Hooters, just travel 900 meters past the cop shop in front of communist headquarters and there it is. All three buildings huddled together within a one mile radius.
One could argue that due to its size, the communist party cannot possibly keep track of all the businesses here. Due to the proximity to Yongchuan’s power brokers, this claim is obviously untrue. The fact that the store is allowed to operate with impunity implies nothing less than state-backing at some level.
Just like any country, China has policies to follow for such things. After all, the party always has its hand out and a highly profitable company means more kickbacks, that is how things work in China. It is thus safe to assume that the communist party would know about the store.
China’s Institutionalized Theft
Rather than enforce IP laws, China has institutionalized theft which has lead to theft of even greater proportions. And nowadays its not just some little guy making clones, even China’s best and brightest are doing it too.
Ever heard of Lenovo? They are the Chinese computer firm that bought the IBM Thinkpad line. Surely a major corporation such as that would not stoop to piracy, would it?
Daily Mail has the photo proof that such piracy exists.
From the looks of it Lenovo has borrowed more than just Apple design, but marketing material too.
But not to worry, Lenovo should not concern itself with potential lawsuits, that iPhone knockoff is only for sale in China. Based on the fact that the Chinese government still owns a substantial portion of Lenovo stock, it is safe to assume they are protected, in China at least.
As troubling as it may be to see a large company like Lenovo stoop to such levels, that is merely the tip of the iceberg. Like I said, China has institutionalized piracy for sale. If you think what Lenovo did was bad, then check out this guy.
His name is Lei Jun and he typifies China’s race to the piracy bottom. This guy went Lenovo one better, he not only copied Apple’s phones and products but Steve Jobs too.
Lei Jun, the founder of Xiaomi has cribbed Apple to its core. As insane as that sounds, it is true. And even more amazing is the fact that Xiaomi is now the world’s third largest cell phone manufacturer.
Xiaomi Pure Knockoff
So successful is Xiaomi at aping Apple that they spend next to nothing on marketing, after all, why should they? They have had tremendous success by pointing at Apple ads and saying, “Our phones do that too.”
Their whole message is that they sell iPhones on the cheap. Xiaomi contends that they source from Apple suppliers and buy pretty much the same gear. Furthermore, they claim to control costs by eliminating wasteful spending on things like retail stores and marketing. From the looks of it, they don’t waste too much on R&D either. Their product cycle faithfully mimics that of Apple.
If the existence of Xiaomi does not prove my point, then I fail to,see what does.
The Chinese don’t seem to care that the US knows that it is building a military aircraft industry on the back of their ideas, indeed they seem to revel in pointing this out as a symbolic humiliation.” – Quote on China’s unveiling an American Stealth plane knockoff during the APEC meeting.
It would be nice to end on a positive note, but I can’t. Beijing’s most recent message is too strong. China’s piracy policy is not about to cease, at least this is how it seems. Take, for instance, what China had up its sleeve during the latest APEC summit held in November. Top on Washington’s agenda was to confront China about IP theft and espionage. Beijing had other plans.
Obama and crew were going to China to demand change. Chinese IP theft costs America hundreds of billions of dollars per year and up to two million jobs, and Washington was going to take a stand. Unfortunately for them, things did not work out as planned. While Obama and crew were discussing IP theft, China was debuting it. That is right, at the exact same time President Obama was visiting China on a mission of rectification, the Chinese were showing the latest in pirated US military hardware.
Beijing decided to time the APEC summit with a series of military arms shows. At these events China literally highlighted weapons pilfered from the American armed forces. For instance, they showed the “Chinese” stinger missile, which was highly encouraged by US designs. But most outrageous was Beijing’s decision to highlight Chinese air power by exhibiting their newest stealth fighter.
According to experts, this plane is nothing more than another Chinese knockoff. It bears an uncanny resemblance to the US F-35 Strike Fighter because the Chinese had some help. “It is claimed, the Chinese got hold of the blueprints to build the J-35 during a cyber-espionage attack on Lockheed Martin dating back at to 2009, or possibly earlier.” (3)
The only positive note to this whole episode was that Beijing proved better at stealing tech than applying it. The PLA stealth fighter was anything but stealthy. Instead of streaking across the skies unnoticed, it left greasy black contrails – hardly the thing for which stealth fighters are known.
Here is what experts had to say, “The criticism of J-31, China’s second fifth-generation fighter jet, mainly stems from the dark exhaust emitting from the jet’s engine….” (4)
Do not despair for the Chinese, however. They see they this mistake as merely an inconvenience. A Chinese navy Rear Admiral had this to say, “China’s reverse engineering still has its limitations, and that it will take (China) another few years to achieve a breakthrough in developing its own engines.” (4)
There you have it. A Chinese officer went on record saying that “reverse engineering has its limitations”. In other words, theft could only get them so far. Sure they could steal designs but did not know how to properly implement them. Talk about adding insult to injury. In this case the result was a less than invisible weapon of war.
He essentially went on to say that the Chinese had pilfered the easy stuff – mechanics, but had problems with mastering digital control. But if the past is any indication, they are working on rectifying this problem as we speak.
China has morphed from a country of disaggregated small time hustlers to state-backed theft. Knockoff American properties litter the landscape proving that foreign IP will not be protected. What’s more, if Beijing is so cavalier in flaunting stolen tech right under our noses, just how big is the problem? From where I am standing, it’s reached a critical mass.
In the past, Beijing at least tried to hide its indiscretions and feigned IP cooperation, this is obviously no longer true. If anything, they seem to be saying just the opposite. During Obama’s visit, Lenovo, a Chinese company listed on the US stock exchange debuts a picture perfect iPhone clone and sells it in China. The PLA flaunts wannabee weapons and Xiaomi becomes the world’s largest handset seller. All of this could not have happened without pilfered American goods and nothing has been done to stop it. Beijing’s message to President Obama and the USA is abundantly clear, “What’s yours is mine and there is nothing you can do about it.”