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China, You Copy Cat, Dirty Rat!

Watch out, the Giant Toddler is Learning to Walk ! The Tale of 2 Operating Systems. Good News for the Christian Missionaries.

This entry was originally appeared in "Guilin - Day 3 - Fengyu Cave, Yao Minority", dated 16-Sep-2009. In my usual way, I went off the tangent and talked about China's IPR development that's why I call myself Rambler Without Borders). I've expanded it a little and thought it deserves a separate entry. This article was originally posted in my blog site.

A story circulated in 2009 about fake chicken eggs were sold in some places in Guangdong, China (this name seems like a headline hog when it comes to fakes as it's the 1st Speacial Economic Zone, the wild frontier of China's entry into Capitalism, and closest to HK). Allegedly that these fake eggs are indistinguishable from the real ones. The wholesale price of the fake egg is half that of a real one. At first, this fake eggs story sound fake - a hoax, but videos with 10 steps instructions on how to make a fake egg to convince you. Still, I find this fake eggs tale hard to swallow as the price of eggs is simply too cheap for the effort. I think this is symptomatic of the distrust of Chinese made goods or the ease of taken in due to all the past stories of fake Chinese products that flooded the market from DVD, designer label handbags to most lucrative of all fakes - cultural antiques that elude even the experts. Does the fake egg story smells fishy? Which is fake, the foul/fowl story or the egg? You'll be the judge. Conspiracy theory aose about the Moon Landing because of people's distrust of the government. Similar logic applied to the Roswell Incident or 9/11.

Atta's dad who shops for grocery everyday - sometimes twice a day - has never came across these fabled fake eggs. I just talked to him last week about this. More than 2 years, and he has never seen it. Yep, he lives in Guangdong. When a country fakes so many things, it's easy to buy into any incredulous story. If the rumour occurs in Japan or USA, people will dismiss off hand. Avoid fake stuff, but avoid fake story too.

Another phenomenon that is related closely to fakes, but distinctly different is the product copycat. Imitation is the most sincere form of flattery. This is very true in arts. Elvis Presley or a hosts of celebrity-artist imitators are not frowned upon, but are in fact grab affection. Spoofs or send-ups in movies aren't sued for intellectual property rights infringement, but are in indeed highly admired. And parody - another form of copycat - is held in the high regard.

This entry was originally appeared in "Guilin - Day 3 - Fengyu Cave, Yao Minority", dated 16-Sep-2009. In my usual way, I went off the tangent and talked about China's IPR development that's why I call myself Rambler Without Borders). I've expanded it a little and thought it deserves a separate entry.

A Tall Tale of Chinese Fakes
A story circulated in 2009 about fake chicken eggs were sold in some places in Guangdong, China (this name seems like a headline hog when it comes to fakes as it's the 1st Special Economic Zone, the wild frontier of China's entry into Capitalism, and closest to HK). Allegedly that these fake eggs are indistinguishable from the real ones. The wholesale price of the fake egg is half that of a real one. At first, this fake eggs story sound fake - a hoax, but videos with 10 steps instructions on how to make a fake egg to convince you. Still, I find this fake eggs tale hard to swallow as the price of eggs is simply too cheap for the effort. I think this is symptomatic of the distrust of Chinese made goods or the ease of taken in due to all the past stories of fake Chinese products that flooded the market from DVD, designer label handbags to most lucrative of all fakes - cultural antiques that elude even the experts. Does the fake egg story smells fishy? Which is fake, the foul/fowl story or the egg? You'll be the judge. Conspiracy theory arose about the Moon Landing because of people's distrust of the government. Similar logic applied to the Roswell Incident or 9/11. The truth is quite different.

Atta's dad who shops for grocery everyday - sometimes twice a day - has never came across these fabled fake eggs. I just talked to him last week about this. More than 2 years, and he has never seen it. Yep, he lives in Guangdong. When a country fakes so many things, it's easy to buy into any incredulous story. If the rumour occurs in Japan or USA, people will dismiss off hand. Avoid fake stuff, but avoid fake story too. In the rest of this article, I'll bust the myth that China only copies others, and that they have no new ideas of their own.

Chinese Low-Price Copycats
Another phenomenon that is related closely to fakes, but distinctly different is the product copycat. Imitation is the most sincere form of flattery. This is very true in arts. Elvis Presley or a hosts of celebrity-artist imitators are not frowned upon, but are in fact grab affection. Spoofs or send-ups in movies aren't sued for intellectual property rights infringement, but are in indeed highly admired. And parody - another form of copycat - is held in the high regard in literature.

Manufacturers don't care for flattery so much as fat bottom lines (beauty is in the eyes of the accountant. And accountants universally like fat bottom lines). In China these copycat products are better known as shanzhai products. Shanzhai (山寨 = 'Mountain stronghold' - places where bandits call themselves Masters of the Manors, Kings of their Castles, Lords of the Lands, Titans of their Turfs). 'Shanzhai' came originally from the Cantonese slang when referring to the low-end factories in Shenzhen, Guangdong. These shanzhai factories specialised in making many fakes and knock-off products from designer labels. These factories make electronics more than other products, so the term shanzhai tends to associate with goods like mobile phones, etc. Guangdong is the Wild Wild South of the industrialising China.

China has no copyright on this copycat phenomenon, it's common to economies at this stage of development. Sony, a name synonymous with forefront of innovation today, was once upon a time a notorious copier of US products (not restricting to copying photocopier machines) in the 1950's when Japan had to restart its economy after WW2. Sony was just one among many Japanese future multinational companies busily mimicking others. US nicked many British product ideas during the 19th century while US was in the stage of similar economic development as China today. And only when the economy is advanced into the next stage that the country is loaded enough to throw wads and wads of cash into the R&D machine. China is already in the initial stage of this economic development with their own designs.

Shanzhai factories don't make these low end hardware because they can. They do it because there's a market for them. At this phase of economic development, the bulk of consumers can't afford the originals with higher price tags (to cover their R&D costs), but still would like to own one. The copycats provide a niche (or give a damn) for the poorer folks. In the West, they are favoured by dudes who just want to identify with the counter culture ("I'm cool because I shop underground goods, pal. I don't dig big name brands; they're strictly for the squares dude. I'm a unique man, man!"). As Chinese consumers' wallets are getting fatter, they would prefer higher-quality, original brands, reflecting their wealth status, and the shanzhai operators simply be marginalised eventually. This news article isn't a single voice in saying China is going o be the 2nd largest luxury goods market soon. They then have to flog their cheap wares to relatively less developed economies, say, their 'good neighbour' or frienemy of Vietnam. Still with the size of China, and the wide disparity of income between the haves and have-nots, shanzhai products won't disappear any day soon. However, the trend is simply that the more people buying luxury goods - meaning original products - the less people buying knock-off designer labels.

Ancient History of Copycats and Industrial Espionage
Australia - the youngest post industrial Western nation in the world - is an industrial granny (actually post-industrial, which implies she had retired from Industrialisation) when compares to the New China who's only an ankle-biter, a teetering toddler of less than 60 years old, and most of its toddling was done in the last 30 odd years after the Opening-Door and Reform policy in 1978, and she's very much still growing and developing her industrial strength, muscles, pimples, warts and all. Lots of it and quite ugly, too. All part of the growing pains. Just grow thick skin, and she can deal with it fine.

The Aussies, on the other hand, were going at it for more than a couple of century with hammer and tongs (so to speak, although this is what industrialisation tries to get rid off - the blacksmith trade - and replaced them with steam driven machines). In the XIX century , while the Yanks were busily stealing ideas from the Limeys, the Brits did some nicking on their own from China. Chinese got the Brits hooked on to tea (and other Chinese products), and thus create a huge imbalance of trade deficit on the British side. Sounds like the same problem China has with the U.S. today. To fix the economic trade imbalance, and to get back at the Chinese for hooking them on tea, the Pommies got Chinese hooked on opium. Nasty business.

It was the Chinese fault too for not buying goods from the Brits to cause that trade imbalance. The Pommies got lots of good stuffs to sell to Chinese. Take the good technological marvel called the car - or horseless carriage - that moved at a breathtaking speed of 35 km/h that was sure beat walking, or the clock that was taller than people, or the tall hats that made you look taller than the grand father's clocks, or the cameras that took pictures of you if you would stand perfectly still for 5 mins, lots of ingenious inventions like that. Great stuff. But the Chinese was contented with just selling tea and silk forever, and missed out the whole industrialisation. What the Chinese should do would be to steal the ideas from the many British inventions as a pay back. Well, the Chinese didn't think anyone else could make anything that interested them or of values. They preferred to close themselves off as they did for centuries. As they did again in the future in the 1st 30 years after the founding of PRC. Bad habits die hard. There's no question that Chinese is a insular civilisation. They built the Great Wall for that reason. They had started to break out of their shell in the last 3 decades (they prefer to be turtle safely tucked its head in the shelf. Turtle is a sacred animal in Chinese culture, and a symbol of longevity. Sure it lives long and feel safe, but leads a very boring life. Well, that what old people or civilisation tend to prefer, safety 1st, screw the adventure, it's strictly for the young people or civilisation). If memory serves, I think it was Deng Xiaoping who said that the only time when China was only great in the past was when it opened itself up to the world. Tang Dynasty was 1 of those time. And the Silk Road was doing brisk trades with the West. Large population of foreigner lived in Xi'an, China - the beginning of the Silk Road.

The Chinese monopolised the world's tea industry before 20th century and wouldn't trade her secrets for all the tea in China. The British Empire called upon the service of Robert Fortune the can-do Scottish botanist to nick the tea plants and its secrets and smuggled it out of China (You didn't need to smuggle opium, however. They sold openly across all opium dens near you. They lived in interesting times). After nicking the plants , he grew it in Indian, and the Darjeeling tea was born. The Indian has the Britishers to thank for this. And Chinese has the British to thank for its downfall (the loss of tea's monopoly, and the gain of opium addiction. Double whammy). The two way traffic now balanced the British trade deficit. Robert Fortune made a fortune, knighted and wrote a book about it. One country's bitter tea is another country's bitter tear. One nation's hero is another nation's thief. One Empire's Mister Fortune is another Empire's Miss(ed) fortune or Misfortune. It's all a matter of perspectives.

And tea isn't the only product idea Chinese invented and was copied elsewhere. One day when China is shifted into the higher gear of developed phase, they will develop their own product ideas, and less developed economies will pinch it from China. Why? Because the world is circular. What goes around comes around. And the Hindus discovered that idea and turned it into a religion. They call it karma. The manufacturers call it industrial espionage. And the intellectual property lawyers call it a main source of income (so sue me). It's all a matter of perspectives.

I'm not picking on the Pommies (just the British Empire), they weren't the only country who pinched product ideas from China. It's just Robert Fortune's tea story is so delicious (or is it bitter? It's all a matter of tastes and perspective). Until 17th century, China had produced more inventions than any country. Of all inventions, international intellectual property protection wasn't one of them. Most Chinese inventions produced before the Industrial Revolution were copied by others. And by the time Industrial Revolution had taken grip in Europe, and China had totally missed it due to the ineffectual Qing Dynasty. Now they're doing the copying. Debt paid. The Circle is complete. The Law of Karma is enacted. Not a defence of Chinese intellectual properties thefts, just stating the fact, M'am. It's all a matter of historical perspectives.

Further back in time. Much further back. Another time, another Empire. This time the Eastern Roman Empire. The time, circa 550 A.D. (after the Silk Road was established). Emperor Flavius Justinian sent two monks to China to steal the secrets of sericulture. The monks hid the seeds of silkworms and mulberry tree in a bamboo stick. Like the subjects of British Empire who couldn't get enough Chinese tea, the subjects of the Roman Empire couldn't get enough silk. The Roman Empire was running a trade deficit (depletion of gold an silver coins) with their hunger for Chinese silk the way the British Empire was hunger for Chinese teas. If you can't beat them, steal them. Seemed like history loves to play the same tune over and over again like a broken record. Those who ignore history will doom to repeat it. And the British Empire ignored it, the way the Hitler ignored the failed Napoleon invasion of Russia. Look what happened...The Roman Senate went as as far as passing an edict to prohibit commoners the right to purchase silk. Only the aristocrats can buy them.

The monopoly of silk by China tilted the supply demand curve in China's favour. I wouldn't be surprise, I think it was likely, if the silk cost more than its weight in gold. It's a very light material. And so Turkey inherited a long tradition and a thriving silk industry for centuries for this reason. In fact, in my packaged tour to Turkey some 6 years ago, our tour group was led into a silk factory in Bursa - the 1st capital of the Ottoman Empire - and shown the process of sericulture. Silk production was an important part of economy of the Ottoman Empire. Another Empire benefited to the silk.

In the old days, it was leading botanist and respectable monk who carried out industrial espionage, today they're done by lesser men.

Learning the Ropes and Rising to the Occasion
As I said before, as China progresses further in the industrialisation, they will steal less and innovate more. This is how baby learn to walk - indeed how we ALL learn - we look and then imitate, ape, copy. Only after we learn to walk than we can learn to run, and then dance. Dance requires some individual creativity. China had learnt to walk and run by imitating, and is looking like is at the beginning stage of learning to dance.

This isn't just a historical trend as I pointed out, but today's patents stats back this up. It's hard to imagine today, the number of patents that China files and being granted are among the top 3 by most measures, only below that of Japan and USA. Here's the official stats in 2010 in terms of patents applied and in force. 30 years ago, these figures for China was probably zero.

While China's upward surge in patents granted in the last decade - like their increase in GDP or Olympic medal counts - is breathtaking. There's no reason at all this trend would stop abruptly. In view of this trend, it isn't hard at all to see that China's total patents granted would quite easily exceed that of USA or Japan in a foreseeable future. Also, have a look at this news article from US News Centre to get a feel of China's future of innovation. By the way, I wrote this entry in 2009 (published in another website), thus predating this news article by 2 years. I'm not saying I'm a prophet, just saying it's obvious.

This is a surprise to some because while PRC produces number of patents only below that of USA and Japan today in the last 10 years, and exceed them in 2012, IPR infringements are still rife in PRC. This isn't because they don't have new ideas, it's just copycat products are simply more affordable to the masses, and copying is always easier than inventing. Also, the government's effort to stamp out this practise isn't quite up to the scratch. This is also changing (albeit not as fast or as far as the victim of IPR infringement would have liked). But you can trust the PRC government would want to uphold this cleaning of copycats because as China itself is wishing or actually becoming an innovator, it wants to wipe out the counterfeiters for their own good. One shouldn't forget too that a lot of the product knock-offs are out of Chinese patents. Still, with country this size, enforcing isn't a trivial task. The moment 1 shanzhai operator is tooted out, another 3 popped up.

I'm not suggeting that this implies that PRC is the 3rd most innovative country on earth. Far from it. I simply say that China only copies and has absolutely no new ideas of its own. Also far from it.

Of course, all these patents stats show is the quantity, not quality, of patents. Once again, the same logic applies to both quantity and quality. It's just a matter of time when PRC produces not only more patents, but patents of higher quality. I'm quite sure some are of high quality (just don't know the percentage). Having said that, I don't think international patent offices simply approve any rubbish that land on their desks. Criteria needs to be met. China is still quite new to this game. The important point is that the Chinese government understands the importance of innovation, and wants to wean itself from being the Factory of the World. And avoid the middle income gap. The Japanese did it, and then the S. Korean and Taiwanese, China likes to copy their successes. Would they pull it off? My gut feeling is, yes. Time will tell.

Brain Drain & the Education System
Having said that PRC steals a lots IPR because there aren't enough Chinese brains to innovate, compare to, say USA. Let's scratch the surface and see how true this statement is. Silicon Valley is the mecca for innovation in America. It's common knowledge that about 50% of the scientists and engineers researching, inventing stuffs in the Silicon Valley are in fact Chinese and Indian. Quite a few of the most well known Internet giants are founded by Chinese and Indian. So while PRC steals IPR, USA steals Chinese brains. Ok, may be 'steal' isn't quite the right word, and 'lure' is a more accurate word. The question for China is reversing this brain drain as USA is very tempting ground for the Chinese scientists and engineers. After all, the USA' per capita income is still much much higher than China's. So if PRC not only manage to stop the brain drain, but in fact reverse it by luring Indian and American bright brains to work in China's Silicon Valley (if it exists), Chinese wouldn't have to steal IPR.

What depicted in this new article is 1 of the way to retain foreign experts by making their staying easier. In a globalised world where talents move around quite easy, it's actually harder to stop the brain drain from China than to attract foreigners.

Once upon a time, a "Chinese expert" or historian said that citizen in Confucian societies couldn't innovate, because they aren't free thinkers. Confucian societies are collective societies, and conformity is encouraged while individual thinking isn't. Nor questioning established beliefs. I would be naively convinced by this linear, simplistic logic if Japan and South Korean aren't 2 of the best innovators of the world to contradict it. German people are said to stickler of rules, and so people would say this people can't think outside the square. We know this to be the opposite with their technological innovation. I totally agree that the Chinese educational system as it stands today won't create creative thinkers because of their emphasis of rote learning or amassing facts like robots rather than learning to think independently. Many of the creative brains in China come from education in the West. It's the education system, not culture that engenders creativity. Japan and ROK have proven this is the case. If Muslim countries have produced belly dancing, Confucian societies could produce creative thinkers.

"To Contradict is Human" - I've given myself permission to quote myself. No copyright infringement. But you guys can quote me - and copy my entire article - 50 years after I'm dead.

The Chinese government is increasingly aware of their outmoded educational system, and is on the way to mend it. Can they succeed? My guess is, they have a very good chance. They have been growing in the last 3 decades on the diet of humble pies, which is extremely nourishing, even if it isn't tasty. Quoting a Chinese saying, "good medicine is bitter" (and so is humble pie, which could be made to go down easier with a nice sugar coating of self deception).

The Troubles with Chinese Copycats
Pablo Picasso maybe a born painter, but he isn't a painter when he was born (he could barely hold a paintbrush. He probably put it into his mouth instead of onto the canvas). When he was a apprentice painter, he copied, and imitated other great masters before him. Only, and only after he did all the copying then he created. Not before.

Here's the thing, when a typical toddler teeters and falls on you, you don't feel much because of its size. So you don't mind when they fall on you. With China the super-size toddler, when she falls as she learns to walk, she may crush your ribcage. For a small toddler, say Vietnam, Washington Post, or New York Times wouldn't give them a the time of day even for a decent critical articles on their IPR activities. Like Oscar Wilde said, the worst thing isn't when people (by people, I meant Washington Post, or Wall Street Journal) gossip about you, it's worst when people ignore you (I paraphrase the Irish gentlemen from memory). Well, China doesn't get ignored often these days. It's a privilege and honour to be the centre of gossip and criticism. In fact, people criticise PRC more than USA these days (indeed, people are paying less attention to Japan as it used to be back in the 1980s. They're - the Japanese ultra-nationals - are absolutely, lividly pissed off by this decline of attention. "Look at me!" The Japanese ultra-nationalists jump up and down, "or else we're going to make the Japanese government buy the Diaoyu Island to get some attention!!!"). It's a good thing to be finger pointed, or even given the finger[1], according to the wise Wilde.

"Mediocre writers borrow; great writers steal" — TS Eliot.

Once again, the world of arts and commerce don't see eye to eye regarding borrowing and stealing ideas. In fact, they have polar opposite attitudes. Borrowing in the commercial world is called technology transfer, and it's totally legit. In fact, welcomed. On the other hand, stealing - i.e. piracy is illegal. Much of Chinese progress in technology accompanied their economic success has been through technology transfer as a foundation in their early days of Opening-Up back in the 1980s and 90s.

The Copycat Image
So why is it that the myth of China being a copycat rather than an innovator so widespread and entrenched? There're several reasons.

1. China's industrialisation is so rapid that the copycats exist side by side with innovators. Since copycats had been here first, first impression lasts. In the movie, "Back to the Future", Doc Brown, who lives in the 1960s said to Marty McFly, who lives in the 1990s that the electronic circuitry in the his Time Machine are shoddy because it's made in Japan. Indeed, Japanese products in the 1960s were of inferior quality, much like Chinese products in the 1990s. They were cheap, but low quality. Japanese manufacturers also had the image of copycats in the 1950s to 60s, again, much like China has today. We don't have that impression of Japan today, quite the opposite. With the ongoing trend of Chinese economic progress, why wouldn't China mirror Japan's and South Korea's technological rise? There're plenty of evident that it does. And no evidence of the contrary.

We don't have the impression of Japan as the copycat today because it has taken the world 3 to 5 decades to shake off people's impression of Japan in the 1960s. It would take the same timeframe for China too. China won't be seen as copycat for another 2 or 3 decades.

2. Actually there're another reason that it's easier for people to change their mind about Japanese and Korean products than Chinese. Why? Both Japanese and ROK are centering on making consumer products like electronics and cars. We tend to familiar with companies like Sony, Apple, Toyota, Westinghouse and Samsung because they make consumer goods that we use everyday. These are household names. However, we're not so familiar with Alcatel, Thyssenkrupp and Huawei because they don't made household appliances. Just because they aren't making consumer products doesn't mean these companies are equally innovative. China future companies are more like Germany and France than Japan and ROK.

Many large and innovative, technological Chinese companies are indeed not consumer goods makers. They make industrial products. What's the point of competing with Japanese and ROK in the consumer markets? It's already too saturated. How innovative China would be if it's doing the same thing?

3. China is so vast that there're always people copying somewhere for a long time to come because cracking down everyone is made more difficult with this enormous size.

History of Cultural Copycats
The best stealing, imitating or copying isn't products of another country, but culture. The Roman stole the Greek culture wholesale, from architecture, arts, literature, music, politics, astrology to religion. And rechristened (if that's the right word) ALL Greek gods to Latin: Zeus to Jupiter, Aphrodite to Venus, Eros to Cupid, etc. Of course, the Roman also created many new things. Well, this is how it goes, first you copy, then you invent, whether it's products or cultures.

The same could be said about Japan of China. Most of the things you thought of as Japanese - Kanji, bonzai, sumo wrestling, Japanese swords, kimono

To read the rest of this article, go here...

Posted by FrancisQ 23:16 Archived in China Tagged culture history china globalisation ipr copyright geopolitics

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