NATIONAL > Feeding the monster
Published: Wednesday, 12 Jan, 2011
China is complaining that western economies place too many restrictions on the technologies that they are prepared to sell to emerging economies, i.e. such as China. But such restrictions are not born of a capricious wish to hold back, they are born of an often unspoken concern that, once in the hands of others, their technological keys will be copied and their capabilities unlocked without the inconvenience of having to pay a license fee.
China is complaining that western economies place too many restrictions on the technologies that they are prepared to sell to emerging economies, i.e. such as China. But such restrictions are not born of a capricious wish to hold back, they are born of an often unspoken concern that, once in the hands of others, their technological keys will be copied and their capabilities unlocked without the inconvenience of having to pay a license fee. To be honest, its becoming the elephant in the room. Everybody knows that the Chinese are trying to steal information and their record in enforcing international patent and copyright agreements is pretty much absent. But diplomatic niceties, a wish not to jeopardise Chinese investment possibilities and the violence with which China reacts to any challenge to its orthodoxy (just consider the recent Nobel Prize ceremony and the bloodcurdling threats that China issued to those countries that attended) mean that the monster is more often than not allowed to get away with it. Even the recent discovery by Renault that interests (most likely Chinese) had been stealing the technology in its cars was rapidly damped down by the French Government, presumably alert to the blackmailing possibilities that accompany China's investment weight. But it doesn't need a business guru to see where this will lead. You cannot appease a monster and feeding it only makes it worse.
Penny Leach, the childcare and upbringing guru explained more than thirty years ago that bad people are the little monsters who were never challenged in their family environment because they had the tendency to 'fly off the handle'. Such people know that, for the sake of peace and quiet, most people will give them their own way and, on the few occasions when they are challenged they know at whom to direct their fulmination to ensure that someone will have the challenge called off. To be fair, China is not the only country acting in this way: at the extreme, North Korea has lifted the noisy tantrum to a high art while Russia has often shown itself perfectly prepared to use whatever power it has, military or economic, to punish those who dispute its view of the world. But if we are to enjoy a truly global economy with the benefits that can bring to all, then we must all play by the same rules and, like it or not, we cannot allow one country to write two sets of its own rules (one for itself and one for those with whom it trades) and simply throw tantrums every time somebody challenges those rules. The long term upshot will be a collapse of the global trade order and, with it, Foreign Direct Investment, Outsourcing and all of the other mechanisms that have the potential to support a balanced world economy for the good of all. In short, we'll revert to the protectionist negative economics of the past.
Now is the time to bite the bullet and explain to China that to benefit from the global economy you'll have to be a global player and simply being big does not automatically confer that. A good start would be for China to acknowledge and enforce international patent and copyright agreements and stop trying to steal intellectual assets so that the advanced economies can at least benefit from the sectors where they do lead.
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