Skip to comments.China's Economic War - Stealing Jobs and Technology From America
Posted on 09/18/2004 6:10:53 AM PDT by traumer
According to GM China, the similarities between its Spark minicar and Chinese Chery Automobile Corp.'s QQ model are more than just mere coincidence. In fact, if you examine the automobiles, they are virtually identical.
Thus, General Motors recently filed a complaint with the Chinese government that the QQ was an illegal copy of its Spark.
Despite the GM charges, Chinese officials quickly denied that State-owned Chery had illegally copied U.S. auto technology. A top Chinese Commerce Minister stated that General Motors Corp. did not provide enough evidence to prove that Chery had copied the GM Spark.
"Unless GM provides further evidence to prove that Chery acquired such technology and designs through certain means, just simple similarity in terms of exterior design isn't sufficient enough to prove that the Chinese company is guilty," said Deputy Commerce Minister Zhang Zhigang. This is not the first time that China has been accused of stealing auto designs and copying them for fun and profit. For example, a failed Chrysler "joint venture" was cited by the U.S. Commerce Department report as a demonstration of Chinese honesty in business.
According to the Commerce Dept. report, in 1995 Chrysler had an exclusive deal with the Chinese Army making Jeep Cherokee 4-wheel drive vehicles at a People's Liberation Army (PLA) owned auto-plant. The Chinese Army auto plant also produced 4-wheel drive vehicles for the PLA.
"Despite almost a decade of relative success in producing both the Jeep Cherokee and a wholly locally produced military style jeep (the BJ2020 series), by 1995 Chrysler had pulled out of its bid to build a new minivan joint venture in Shanghai out of complete frustration," states a January 1999 U.S. Commerce Dept. report on technology transfers to China.
"Chrysler executives were expressly concerned over licit and illicit technology transfers," noted the 1999 Commerce report.
"Chrysler's concerns were amplified when Chrysler CEO Robert Eton was made aware that knock-offs of Chrysler's Jeep Cherokee had been seen on the streets of Beijing. When complaining about this to Chinese officials, he reportedly was told that this (the ability to copy Chrysler's Jeep Cherokee) was a good sign of progress in China's auto industry, about which he should be pleased. Apparently, he was not, and Chrysler soon canceled plans to go ahead with the Shanghai plant," states the report.
In addition, the Chrysler deal with Beijing had a further twist that sent it over the edge. The Chinese Army interest in advanced vehicle manufacturing technology from Chrysler was a special indication of the reality of doing business with Beijing.
"Chinese officials were demanding more advanced technology than seemed appropriate or necessary to Chrysler," concluded the Commerce report.
Chrysler was at that time the maker of the U.S. Army M-1 tank.
Chrysler officials quickly realized the advanced assembly and manufacturing technology demanded by the Chinese was far more applicable to making armored vehicles such as the U.S. Army M-1 tank than vans for soccer moms.
"According to interviews conducted for this study, given the experience in Beijing, Chrysler executives were made even more wary of the technology transfers, proposed licensing deals and export quotas being requested as part of the Shanghai deal and decided that the risk was simply too great when it came to what was for Chrysler a relatively new (the minivan) and, therefore, advanced technology. Chrysler currently has no plans to expand its investment ventures in China," stated the Commerce Dept. report.
The failed Chrysler deal is not the only example. Audi, the German car maker, also had a sweet deal with China to manufacture its very popular 5000 sedan during the 1990s. However, once the terms of the deal expired, Audi was hustled out of China.
Suddenly, the same Beijing car maker began producing the "Red Flag" sedan. The Red Flag was identical to the Audi 5000 right down to the last nut and bolt - with the single exception of a plastic red-flag hood ornament.
Chinese officials scoffed at Audi's accusations of out-right theft and cited the red flag as proof the vehicle was different.
Nearly a decade has passed and things have not changed much. A recent study issued by the U.S.-China Economic and Security Commission warned of Beijing's policy of piracy and illegal technology transfer requirements.
"China continues to tolerate rampant piracy of copyrighted U.S. material, with rates running above ninety percent across all copyright industries for 2003. This will cost U.S. industries an estimated $2.6 billion in lost profits in 2004," noted the 2004 report by the U.S.-China Economic and Security Review Commission.
"U.S. companies are sometimes forced to transfer technology to Chinese partners as a condition in business deals. The Chinese government violates its WTO (World Trade Organization) obligations when it expressly requires technology transfers as a condition of doing business. It is also able to compel such transfers through use of its regulatory powers as well as its extensive role in the economy. These technology transfers pose substantial economic and security concerns for the United States," states the 2004 U.S.-China report.
China's ability to copy products and sell them illegally on the open market is not limited to commercial manufacturing. China currently sells copies of the Russian made AK-47 rifle on the open market. China has sold nearly a million such rifles around the world without making a single payment to Mikhail Kalashnikov, the designer of the AK rifle.
Another Russian example is the Chinese made illegal copies of the MiG-21 fighter jet. In 1961 the Soviet Union licensed the manufacture of the MiG-21F jet fighter and its engine to China. China began manufacturing the MiG-21, known as the Jianjiji-7 or J-7, in early 1964. By 1989 Chinese production was running at a rate of as much as 14 aircraft per month, primarily for export. Today, the J-7 aircraft is the most widely produced Chinese fighter. Nearly 1,000 J-7 fighters have been manufactured and sold worldwide. Chinese customers include Sudan, Iraq and Pakistan.
However, China has not paid on the MiG-21 manufacturing license since the fall of the Soviet Union, claiming that the aircraft deal expired along with the former Soviet state.
China is obviously not living up to its commercial expectations. Illegal copies and stolen technology are only a few examples of the economic policies of Beijing. The open economic warfare waged by China against America is in violation of its own agreements and treaty obligations.
The U.S. companies that so heartily supported open trade with China are now beginning to regret the deals they made with Beijing. Tyrants don't have to play fair or by the rules. GM, Chrysler and others are learning as they pay the financial penalty of a fools bargain.
I shudder at the thought of how many Chinese Enrons and Worldcoms there must be. Thieves are also liars.
I have a lot of problems feeling any sympathy for US companies who have their technology stolen by China after they have moved their plants there. I say its poetic justice and to bring back the jobs to the US.
Isn't it funny how the whole rationale for Nixon was access to the China market. And what has actually happenned is that China gained access to the America market.
The only problem is that these companies are exporting technology the Chinese can't produce because of their backward totalitarian sytem; and we give them military advantages they don't have the social evolution to handle.
The question is, why is America letting China import cars in here. This will destroy GM, Ford and Chrysler.
I wouldn't allow one Chinese car in here.
The Chinese Govt. are Lying Godless atheistic Murderers!
This is typical Business in China..Sucker American and other Companies to come into China under some fraudulant
Business deal, and then steal the technology and produce the items in a totaly Communist owned Factory using slave lobor and undercutting the competition. I am Laughing at the Stupid leaders of General Motors for being so gullible
to think these Godless Athiests have any Moral fiber. They are Devoid of Truth and Contracts are meaningless.
WAKE UP!!!! WAKE UP!!!! America..The Chinese Communist Govt. is waging Economic War with Us. Stop buying their Cheap crap that is flooding our stores!!!! it is everywhere
or havent you noticed? Boycott China! STOP sending our money to a Godless Murdering Govt. You are only killing your jobs here!
Yes --- the Chinese aren't stealing the technology, they're being handed it on a silver platter, along with a whole lot else. When the greedy American companies go belly up --- so what? They didn't provide Americans any jobs --- why should anyone care?
How is it...
"sleep with dogs and you'll end up with flees" ?
Chinese Chery - is that the Chinese version of Cherorlets?
The similarity of design of the two vehicles is "purely coincidental" you understand. Similar problems (producing a motor car) produce similar solutions. In fact, there is a situation where a Japanese manufacturer (Mazda) builds vehicles that very much resemble those of an American manufacturer (Ford). Again, just sheer coincidence.
Well since Ford has a huge stake in Mazda(40 per cent I think), they share technologies....just like Ford has an arrangement with KIA as well!
I'm more concerned about the technology than the jobs. It's easy to make more jobs. Technology requires a little luck.
American CEOs send US technology and trade secrets to China. Short term, they get cheaper suppliers, thus boosting profits (and CEO stock option value). Long term, the Chinese steal the trade secrets and the company suffers
But, guess what? CEO's, on average, are with a company for less than 5 years before moving on. By the time the bad stuff happens, they've already pocketed their money and are elsewhere, or retired
The China gambit is a scheme by CEOs to loot their own companies, and America's future
Yes --- it's amazing ---we turn over our economy -- the best part -- the manufacturing over to a Communist dictatorship and we think they're going to be nice and fair. Why would they be? They don't believe in things like Capitalism, freedom, competition. Communism doesn't lead to inventiveness --- what else would we think they were going to do?
I am concerned about jobs too.
My point is that US companies have to learn (=get burned) before the outsourcing trend can possibly change....
The two go hand in hand. Out of work American engineers will find other work to do --- many are working in other fields now, some have become Walmart greeters but while they're doing those other jobs, they don't have time to develop technology.
Agreed. We would be far better off if we had left China to be a third world country. All we did was create a future threat both economically and militarily.
That's really all I need to know about GLOBALIZATION. The Free Traitors need to realize that this makes our nation less secure.
They are also sending research and development.
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