Chinese Intellectual Property Theft and the Russian Military
This entry was posted on 6/3/2009 6:44 PM and is filed under uncategorized.
The standard story about emerging markets is
that they will follow the development path of Japan, Korea and Taiwan and move
up market. I have problems with this thesis for China, because up market
involves higher technology. High technology requires intellectual property. To
create good intellectual property you need to protect it.
In the 19th century the United States was
one of the biggest thieves of intellectual property. I am sitting
three kilometers from the first textile mill in the US founded in 1793 with
plans that Samuel Slater had memorized from English mills. The American
industrial revolution was started with an act of intellectual property piracy.
Of course, the US became a bastion of intellectual property protection when it
produced its own crop of inventors. A countries enforcement of intellectual
property is a question of whether the local water buffalo is getting
gored.
In China products based on intellectual
property theft make up an estimated 8% of the local GDP. With so much of the
economy based on it, the process is hard to reverse. Actually enforcing
intellectual property laws would mean hurting economic activity in the short
run. Since the CCP depends on economic growth for its legitimacy, it isn't done.
As a result the problem gets worse, as the Russians found out.
The usually-robust strategic
partnership between Moscow and Beijing has hit a rough patch over allegations
that China is pirating one of Russia's premier military projects.
According to Defense
News, suspicions are mounting in
Moscow that the PRC is creating an unlicensed variant of its Sukhoi Su-33
fighter jet. Russian defense industry officials are said to be "closely
monitoring" the situation, and have halted negotiations to sell China the
multi-role aircraft. China is said to interested in the carrier-borne fighter as
an extension of its plans - aired earlier this year - to build its first
indigenous aircraft carrier.
