Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

China Moves a Step Closer to Economic Superpower Status

Economics / China Economy Jun 04, 2009 - 04:10 AM GMT

By: Money_Morning

Economics

Best Financial Markets Analysis ArticleKeith Fitz-Gerald writes: When a Beijing court recently ordered three China automakers to pay more than $3 million in aggregate damages for allegedly selling a knockoff of an upscale German tour bus, it underscored that China is getting serious about intellectual property theft - one of the next major steps the Red Dragon needs to make as it evolves into a true global economic superpower.


Intellectual-property theft not only remains a major problem in the world markets - it actually seems to be escalating. And many of the worst offenders continue to operate in the Asia-Pacific Region.

Take software. Software piracy in this part of the world continued to worsen last year, fueled by the rapid growth in computer sales and the growing availability of bootleg programs online, concluded an annual survey of the Business Software Alliance (BSA) and industry research firm IDC. An estimated 61% of the software in use in the region in 2008 was unlicensed, up from 59% the year before. That cost software vendors $15.3 billion, up 8.3% from 2007.

On a worldwide basis, software piracy cost producers nearly $53 billion.

And that’s just software. It doesn’t include piracy of movies, music, or engineered products such as computer chips, machinery or even motor vehicles - including tour buses, the focus of the recent Beijing court case.

In this particular court case, the First Intermediate People’s Court of Beijing found that the A9 Coach made by the Zhongwei Passenger Coach Co. and the Zhongda Industrial Group Co. was virtually identical to the $292,000 Starliner made by Germany’s NeoPlan GmbH. The Chinese manufacturing companies have been ordered to stop producing the A9 and Beijing Zhongtong Xinghua Auto Sales Co. has been ordered to halt sales of the vehicles.

NeoPlan developed the Starliner back in 2005 and made sure it was well covered by patents. The high-end tour bus is produced both in Germany and in Southeast China’s Zhejiang Province by the Youngman Coach Co. A year after the Starliner debuted, the German company discovered that Zhongwei’s A9 was all but a carbon copy of its own Starliner. NeoPlan sued for patent infringement.

The defendants claimed the A9 coaches were developed independently, but the court ruled that apart from some slight differences, the two vehicles were essentially identical. The three Chinese automakers were ordered to pay German bus-maker NeoPlan an aggregate $2.92 million in direct compensation and $169,000 dollars in legal costs.

These particular numbers aren’t big.

But the impact of the court ruling could be.

Western firms - from the United States and Europe - want to capitalize on China’s vast business promise. And they want to make investments in, and create joint ventures with, China-based firms. But Western companies also want some assurances that the products, technologies, production processes, trade secrets and other intellectual properties that they’ve spent billions developing will enjoy some legal protections beyond their native borders.

When it comes to intellectual property rights, consumers and corporations here in the United States have long viewed Asia as untamed territory, with no rules - and with little hope for order in the future. But I knew differently. What critics failed to understand is that China really does “get it.” And that’s why I’ve spent years urging patience, even as I’ve urged continued investment.

 China understands the stakes better than Westerners think. Its leaders have long understood that there would be open, measured change that is directly proportionate to their country’s emergence on the world’s stage.

Now that China is clearly assuming that global mantle, its leaders are shrewdly speeding up both the timetable and, in an important vote of confidence for foreign investors, the penalties associated with intellectual property violations.

For instance, according to recently issued directive from the Supreme People’s Court, victims of copyright theft can now receive as much as $146,000 (up to 1 million yuan) in compensation for cases where intellectual property has been stolen.

That may not seem like much in the Western court system, where multimillion-dollar rewards are the norm, but it’s an important step forward in China. In fact, as I discovered during my recent investment trip to that country, the People’s Court directive contains three key elements that should make it easier than ever before for Western firms to protect intellectual property. Specifically, the directive:

  • Is much broader in both scope and intent than past efforts. Covering everything from Web-based domain squatting to CD and DVD piracy - and even covering designer-clothing knock-offs - the ruling is supposed to aid the clampdown on local piracy. It’s also intended to help Western companies become more confident that their property rights will be protected, an advancement that should encourage those firms to boost their investments in China.
  • Finally puts some real teeth in the potential penalties.
  • And no longer requires that foreign plaintiffs be physically be in the country at the time of the legal proceedings. Since U.S. companies will now be able to have local counsel acting on their behalf, it opens the door to more rigorous enforcement and an increasingly willing number of companies likely to challenge infringers.

The results are already visible.

The actual number of intellectual-property-rights claims in China’s courts rose by more than 30% last year. According to the China Daily newspaper, China’s courts concluded 27,876 property rights infringement cases last year, a jump of more than 32% from 2007.

I can’t wait to see what’s next with other well-known pirated brands we’ve highlighted to readers. In early January, we took you to the East Coast China city of Nanjing, where a new mall contains a McDonald’s Corp. (MCD) look-a-like burger bar called “McDnoald’s,” a Starbucks Corp. (SBUX) style coffee shop called “Bucksstar Coffee,” and a wannabe Pizza Hut called “Pizza Huh.”

While there is clearly a long way to go on this issue, the increasingly serious stance that Beijing is taking with regards to intellectual-property-rights protection is yet another important step in China’a modernization. As such, the chances are very good that it will not only encourage an  entirely new wave of Western investment, but a whole new level of product development and cooperation, too.

And that will be good for both the United States and China, especially as we work our respective ways out of the ongoing global financial crisis.

[Editor's Note: Thirteen trades. All profitable. Since launching his Geiger Index trading service late last year, Money Morning Investment Director Keith Fitz-Gerald is a perfect 13 for 13, meaning he's closed every single one of his trades at a profit. And he did this in the face of one of the most-volatile periods since the Great Depression. Fitz-Gerald says the ongoing financial crisis has changed the investing game forever, and has created a completely new set of rules that investors must understand to survive and profit in this new era. Check out our latest insights on these new rules, this new market environment, and this new service, the Geiger Index.]

Money Morning/The Money Map Report

©2009 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules