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US Senators Voice Concern Over Chinese Access To Intellectual Property (reuters.com) 115

Leaders of the U.S. Senate Intelligence Committee said on Tuesday they were concerned about what they described as China's efforts to gain access to sensitive U.S. technologies and intellectual property through Chinese companies with government ties. From a report: Senator Richard Burr, the committee's Republican chairman, cited concerns about the spread of foreign technologies in the United States, which he called "counterintelligence and information security risks that come prepackaged with the goods and services of certain overseas vendors. The focus of my concern today is China, and specifically Chinese telecoms (companies) like Huawei and ZTE that are widely understood to have extraordinary ties to the Chinese government," Burr said. Senator Mark Warner, the committee's Democratic vice chairman, said he had similar concerns. "I'm worried about the close relationship between the Chinese government and Chinese technology firms, particularly in the area of commercialization of our surveillance technology and efforts to shape telecommunications equipment markets," Warner said.
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US Senators Voice Concern Over Chinese Access To Intellectual Property

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  • by Anonymous Coward on Tuesday February 13, 2018 @12:16PM (#56115935)
    We sold our soul long ago when we allowed the blind capitalistic pursuit of cheaper labor to ship a large portion of our manufacturing capacity overseas, primarily to China. Anyone with a brain understood that by doing this we were giving them our IP and in the long term it would probably be a bad deal for us, but we allowed short term pursuit of higher profits to make the decisions and the government was perfectly happy to look the other way, as long as those fat corporate campaign contributions kept flowing.

    I don't blame China. They simply used our greed against us. Well played, China. Bravo.
    • What should we have done instead? Built a wall around America to keep ideas from leaking out?

      • by Anonymous Coward

        What should we have done instead? Built a wall around America to keep ideas from leaking out?

        Seriously? Do you not possess any reading comprehension whatsoever?

        ...when we allowed the blind capitalistic pursuit of cheaper labor to ship a large portion of our manufacturing capacity overseas, primarily to China.

        Perhaps not shipping our manufacturing base overseas.

        Idiot

        • Perhaps not shipping our manufacturing base overseas.

          How do you accomplish that?
          Make it illegal to export machinery and equipment?
          Scan emails to foreigners, to ensure they don't have any blueprints or designs?
          Make it illegal for smart people to travel abroad?

          In the 1990s, we banned the transfer of cryptographic technology. Today, this is widely viewed as a disastrous policy. Since companies could not export crypto software written in America, they did all their crypto development elsewhere, so America lost both jobs and expertise, the exact opposite of the l

          • Our US (ahem, I mean "global") corporations have moved manufacture of their products overseas. The factories that would have been built here were instead built there. The environmental regulations (pre-Trump at least) and labor laws are not those that would have governed employees here but instead are whatever is the law there - often much lower standards. Oversight and potentially control of the means of production is now in the hands of foreign governments.

            If, to take one example, China decided tomorro

            • If, to take one example, China decided tomorrow to cripple the US they could simply stop allowing products manufactured on their soil being exported to the US.

              ... and immediately be dealing with 50 million unemployed people and a great depression as the Chinese economy implodes by 26%.

              China depends on exports far more than America depends on imports.

              • Yes, I think I mentioned that in the sentence that follows the one you quoted.

                But my point was not "balance of trade"; it was that US total dependence on Chinese manufacturing could result in crippling of the US economy should China at any point decide to stop manufacturing goods for the US. That's both an economic and a security issue.

                Now I'm not suggesting that China would do such a thing for her economic benefit. But should there be rumors of war, watch out.

      • Our capitalists had the choice
        Less expensive labor from overseas...
        Or massive investments in retraining and employing that 19% of Americans who are healthy but unable to find work
        The Capitalists sold the rope and the wood and the saws for the gallows.
        Wonder if they will stick their heads through and grin?
    • by TheRaven64 ( 641858 ) on Tuesday February 13, 2018 @12:37PM (#56116097) Journal
      20 years ago, I attended a talk by a Sinologist who talked about Cocoa Cola's entry into China. The Chinese government had required that they partner with a Chinese company and produce their product locally, in 1984. The Chinese company then spent 10 years studying Cocoa Cola's products, workflow, supply chain, and so on until they understood it better than Cocoa Cola. Then they started producing their own versions, and used this as leverage to increase their ownership share of the joint venture. Anyone who engaged in this kind of 'partnership' after this point had no excuse for claiming that they were doing anything other than selling their company to the Chinese
      • There is no secret to making "cola" and in blind taste tests, people do NOT prefer CocaCola to other brands. In fact, most people prefer the sweeter taste of Pepsi. The only advantage that CocaCola has is their brand. The Chinese did not learn to make cola by "stealing" Coke's "secret recipe".

        • by DrYak ( 748999 ) on Tuesday February 13, 2018 @01:06PM (#56116313) Homepage

          There is no secret to making "cola" {...} The Chinese did not learn to make cola by "stealing" Coke's "secret recipe".

          What the above poster is trying to tell about is not the actual recipe of Coke's own spin on cola-based caffeined drinks.
          (The recipe isn't actually that much a secret. e.g.: In several markets, local food and beverage law require the content to be explicitly stated on the label).

          What is the key matter is that the Chinese owners of the outsourced manufacturing plant will analyse the *process* of manufacturing - i.e.: the methodology used by Coke to produce their drinks at industrial scale.
          And that's the thing they can better : making a manufacturing plant better and more efficient at producing soda drinks.

          To quote the relevant part :

          The Chinese company then spent 10 years studying Cocoa Cola's products, workflow, supply chain, and so on until they understood it better than Cocoa Cola.

          To make a much beloved /. car analogy :
          they didn't copy the general concept of making a metal can box with 4 wheels and a motor on it.
          they looked at how Ford's specific own-invented Ford process to mass-produce cars, they'll look into the basic feature sets that seem to interest customers and that manufacturer seem to concentrate on (everyone wants extra features like radio and cup holders)
          then they'll get good at making not so bad knock-offs at a smaller price and craptastic "only in shape" copies, that sell at a fraction of the price but still somehow hold together long enough for the customer to buy them and only break down later on the way home.

          • China has yet to mass-produce a car Americans will buy, except one designed by someone else. Otherwise they would have brought one over here by now. Every year, the press says "this may be the year" and then it never is. With that said, this may be the year :)

            • by AK Marc ( 707885 )
              The US market is explicitly protectionist. Once one Chinese maker spends the billions to enter the US market, the rest will follow, whether separately or as sub-brands of the first. Though the names of the Chinese makers are generally horrible. No cowboy wants to drive around the ranch in a "Chery" or SAIC. They'd do better buying the Datsun brand from Nissan, or buying up a disused American make, like https://en.wikipedia.org/wiki/... [wikipedia.org] a make clearly owned by a single person, that could be bought by a C
          • by AmiMoJo ( 196126 )

            It's Coke's manufacturing process really a secret or even particularly innovative? They are far from the only big beverage manufacturer, and much of the technology is made by industrial process experts rather than developed in-house.

            I can't really see much of a barrier to a western company simply hiring some ex-Coke employees and learning their "secrets". The thing that stops it happening is the vast amount of money required to set up a factory and distribution network at that scale, and the difficulty of e

            • It's Coke's manufacturing process really a secret or even particularly innovative? They are far from the only big beverage manufacturer, and much of the technology is made by industrial process experts rather than developed in-house.

              I think the issue is that due to the dual ownership of the Chinese Coke company, anything new that Coke does to become more efficient is instantly also taught to their competition, whereas, I doubt that this is reciprocal. Certainly not if the Chinese company takes all Coke knows, and all they know, and come over here and start a company in this market.

          • this part:

            then they'll get good at making not so bad knock-offs at a smaller price and craptastic "only in shape" copies, that sell at a fraction of the price but still somehow hold together long enough for the customer to buy them and only break down later on the way home.

            They don't figure out how to make junk. It starts out as junk because it takes time to fully copy a complex process. Before you know it their stuff is better. This is exactly what happened to US radio manufactures experienced with the J

          • by tlhIngan ( 30335 )

            (The recipe isn't actually that much a secret. e.g.: In several markets, local food and beverage law require the content to be explicitly stated on the label).

            And in practically every market, you have to disclose the ingredients. But knowing the ingredients doesn't give you the recipe - it just gets you what goes into the recipe. You don't know quantities, relationships between ingredients, what gets combined with what and cooked at what temperature and for how long (process).

            The basic ingredients on a can

            • Not really. The loophole is "flavour" and "spice" to protect trade secrets. It's not mandatory, AFAIK. I quick google searches says potential allergy ingredients need to be declared but not a bunch of general ingredients.
          • What markets explicitly require every ingredient and quantity? An example label would be nice. At the Mexican resorts I vacation, one of the ingredients is concentrated cola. I can see that easily defeating some disclosure requirement and protecting the formula.
        • In fact, most people prefer the sweeter taste of Pepsi.

          You are not only wrong, but you're a terrible person.

        • I wish RC Cola would steal the diet cola recipe from just about anyone else. That shit tastes like Dr. Pepper.
      • by Anonymous Coward on Tuesday February 13, 2018 @01:27PM (#56116509)

        I worked for Procter & Gamble 20+ years ago. Back then there was a project for P&G to start making Crest toothpaste in China, part of the entry in to that market. Well, long story short, we had to hand over all the IP related to Crest and the manufacturing lines to them to even get the 'right' to enter into the market, plus every tube of toothpaste sold there had to be manufactured there. What we did is get 1950's era line(s) back in working order and shipped them over, plus the old Crest recipe from same time. So both China and P&G benefited. China for jumpstarting their research into toothpaste and P&G entry into the market. Now many years later P&G is almost out of the market as local companies in China now have the 'inside' track on deals/market share, etc, etc.. So, if anyone thinks the Chinese play fair, you have your head in the sand, but the opposite is true as well, if US Corporations hadn't sold their soul and IP to China they wouldn't be in the pickle they are today, and the US as well.

        • I watched a program on toothpaste making. They seemed to show the whole process, only hiding their quality assurance criteria and claim to have such good QA, they'll throw out a big ass batch if it's not up to their grades. Tl;dr: crush up rocks and check consistency. Adjust to taste.
      • You could make the point that it is good for knowledge to spread across the globe. By China catching up technology-wise and learning from the west, they can break new ground faster instead of having to reinvent the wheel. At some point the technology will also flow back and humanity benefits as a whole.

    • by Anonymous Coward

      Selling them the rope they will use to hang us.

      That is literally what America has done, and now after they've all gotten their paydays from ignoring it from so long all of a sudden they want to shout out 'takesies backsies!' as though we will magically regain our former level of dominion so we can maintain our almost century long hubris (longer really, but the current hubris is mostly post-WW2 due to aging out.)

      Anyone who thinks china lacks creativity or the research mindpower necessary to eclipse us, hasn'

    • by Anonymous Coward

      Small detail: much of that IP was developed and brought to you by Chinese nationals on H1B visas to begin with. Calling it "IP theft" makes you look like idiots.

    • at least when stuff was made in mexco it was no red china with there soft IP laws.

    • Re: (Score:2, Insightful)

      Guess what? Everyone steals from everyone else, one way or another. Knowing something can be done is more than 50% of the way towards being able to duplicate it. Smart companies don't just duplicate someone else's work, they improve on it, and 'steal' their market share that way. So far as I can tell it's always been this way; it's called 'competition'.

      The real concern is enemies of our way of life stealing our classified technology. Of course we do that to them, too. Something else that's always been th
      • by ttsai ( 135075 )

        Guess what? Everyone steals from everyone else, one way or another. Knowing something can be done is more than 50% of the way towards being able to duplicate it. Smart companies don't just duplicate someone else's work, they improve on it, and 'steal' their market share that way. So far as I can tell it's always been this way; it's called 'competition'.

        I think you're using "steal" as a synonym for acquire. There are many ways to acquire technology. Most people generally applaud R&D that utilizes publicly available information. Most people probably also condemn criminal theft of technology. Then there is the gray area, where technology is effectively stolen but where the theft is legitimized via laws that explicitly proclaim such theft to be lawful. This is the case in China. Yes, the companies voluntarily enter into these theft arrangements, but

    • Re: (Score:2, Interesting)

      You are conflating capitalism and globalism. they aren't the same thing at all. Capitalism and greed work great, except when you mix them with globalism or communism. What we have is not a failing of capitalism, it is the result of a government allowing free trade in a global environment which has non-capitalistic (e.g. communist, socialist, and control-economies of other varieties) acting within it. At a bare minimum we need to eliminate free trade and match tariffs to the cost differences of products,

  • "I'm worried about the close relationship between the Chinese government and Chinese technology firms, particularly in the area of commercialization of our surveillance technology and efforts to shape telecommunications equipment markets,"

    So, we should all be worried because this senator is also worried - even without any evidence warranting the worry. Right? Isn't that how we ended up bombing [chaos into] some country in the Mideast more than a decade ago?

    • So, we should all be worried because this senator is also worried - even without any evidence warranting the worry. Right?

      What are you talking about "without any evidence"? There is a history of Chinese corporations acting exactly how they are describing.

      Isn't that how we ended up bombing [chaos into] some country in the Mideast more than a decade ago?

      Nice strawman but nobody is talking about dropping bombs in another nation.

    • I'm more worried about the close relationship between the US government and US technology firms, like Verizon corporate douche-bag Ajit Pai becoming head of the FCC.
  • by Snotnose ( 212196 ) on Tuesday February 13, 2018 @12:20PM (#56115951)
    Maybe now is a good time to shut the barn door.

    Don't forget how to properly differentiate:
    - Worrisome Threat To Our Technological Edge: the Chinese/Indians reached in and took the secret sauce
    - Shortage Of Qualified Engineers: we brought in people from China/India on short-term visas, taught them the secret sauce recipe, and forced them to return home.
    - US Companies Must Remain Competitive: we outsourced the secret sauce to China/India to boost our quarterly results.
  • We don't want other countries getting access to IP, however we don't want to regulate business and allow them to do what is the most profitable, but we want these business to hire only American workers, without telling the companies that they have to hire American workers. We want to hire American workers to fill all the jobs, but we are at full employment and companies have a hard time finding employees.

    • by AmiMoJo ( 196126 )

      It's ironic that they don't see the parallels when US companies use broken encryption standards created by the NSA, or are at the mercy of secret National Security Letters. At least the Chinese government doesn't try to hide what it's doing, not that I'm condoning it.

  • by hyades1 ( 1149581 ) <hyades1@hotmail.com> on Tuesday February 13, 2018 @12:30PM (#56116045)

    And these corporate blow boys are just now figuring out that dealing with China means they will suck every iota of technology out of your company and throw it back a year later as their own?

    Seriously...it's 'way past time Americans at least made a token effort to get control of their government back from the oligarchs.

    • by AHuxley ( 892839 )
      The CIA should have warned the USA decades ago. But no. The CIA thought letting the US university system fill with academics from China would spread democracy back to China.
      That the carefully selected Communist party members allowed into the US university system to "study" would love freedom so much they would make China democratic when they returned to China.
      That the CIA could gain spies deep in China by been nice to academics from China while in the USA.
      Did China allow the CIA charm to build up a huge
  • Free backup! (Score:2, Insightful)

    by Anonymous Coward

    Listen - we put Donald Trump in the white house.

    Donald Trump.

    No, really - Donald Trump.

    If I were some other large nation, I'd want to send some folks over there to just, well, save any important pieces of information, perhaps get a few pieces of future historical artifacts before this small era of human history crashes.

    Seriously - we elected a cartoon parody of human greed and cruelty as our president - by choice. Many things have gone horribly wrong if you can't recognize how utterly stupid that is.

  • by nospam007 ( 722110 ) * on Tuesday February 13, 2018 @12:48PM (#56116191)

    Trump will sell them a few airports shortly, they already bought a few ports.

  • by HangingChad ( 677530 ) on Tuesday February 13, 2018 @01:15PM (#56116405) Homepage

    Never mind the Russians trying to undermine the duly elected government of the United States with the assistance of a national political party. Let's pay attention to the Chinese instead.

  • by houghi ( 78078 ) on Tuesday February 13, 2018 @01:26PM (#56116503)

    The way they treat IP, I think it will be in better hands than what the US is doing with it. Midn you, I am eneither Chinese nor USian, so I will get screwed no matter what (alas not by a female).

  • For years companies offshore tech to China and provide nice campaign contributions to politicians, now these people are crying foul.
  • The US also has its computer hardware, software, and other technologies being used in China. Microsoft, Google, Facebook, etc., also have extraordinarily close relationships with the US government, e.g. They all make a handsome profit selling surveillance data and analysis services to US security agencies and other allied countries. Meanwhile the NSA, CIA, and FBI are working tirelessly to make US software less secure and more vulnerable to malicious attacks more than ever before. If anything's a threat to
  • by Anonymous Coward

    Interesting article in The Atlantic:
    https://www.theatlantic.com/magazine/archive/2018/03/trump-china/550886/
    Trump has abdicated US "soft power" everywhere just as China builds up its own global influence.

    By showering him with perks (21-gun salute, banquet in the Forbidden City, etc.), China is treating Trump just as his casinos do to gamblers by encouraging them to continue to lose money.

  • by ewibble ( 1655195 ) on Tuesday February 13, 2018 @02:15PM (#56116909)

    The whole concept of owning IP shipping manufacturing overseas is flawed. IP is a made up asset that can be removed at any time with no effort the part China. All they have to do is say they won't follow US patent and copyright law an they have all the manufacturing capabilities and all the intellectual property. What exactly can the US do about it?

    That is the problem with made up assets they can just as easily be unmade.

  • to the folks who are really in charge. They're not bound by country any more. They've got world wide investments. They global, not local.
  • When counties are looking to modernize they take a lax view of the IP in other countries. As it reaches the state of the art for the day and starts to push the boundaries then they will respect IP rights as they will want theirs respected. Eventually China will become a leader in pushing their IP protection onto other countries. This is quite a while off but it will happen. The US has gone through these stages, ignoring the IP of British companies when the US was trying to build up it's manufacturing base.

  • Would have been nice if the government and private companies had thought of this 10 years ago. It is now too late and companies have little choice but to give China whatever it wants for free.

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