• Sep 20th 2010 at 10:31AM
  • 73
So you want to sell your foreign cars in China? If you're an automaker, it might cost you a whole lot do so. A report in The Wall Street Journal claims that the Chinese government wants to force foreign companies to divulge their electric vehicle technology secrets in order to sell their products in China.

China wants to become a global power in the development and production of electric cars and hybrids. Apparently, they want to skip the whole research part and go right to utilizing technology developed and tested by others. This would be fine if they wanted to pay for said tech, but simply bullying manufacturers into handing it over is not the way to go.

From the WSJ:
"The car executives are joining a chorus of companies criticizing China's industrial policies. Business people and government officials say Beijing's so-called indigenous-innovation efforts discriminate against them and are aimed at gaining control of foreign intellectual property."
China is a very important market for automakers, as it's the world's largest purchaser of automobiles. China's current proposal says that any foreign automaker wishing to produce new-energy products there must establish joint-venture agreements with Chinese companies. The foreign automaker would then only be allowed to hold a 49-percent stake in the newly formed alliance. Obviously, this isn't sitting well with companies that have invested massive sums of money developing new energy-efficient solutions.

Forcing a so-called "alliance" that all but hands over highly-valuable intellectual property to the Chinese party is not an example of China "playing nice" with others. Hopefully, a more workable solution can ultimately be agreed upon. Unfortunately, China has a lot of leverage here. It knows exactly how important its market is to every other automaker on Earth, and it's obviously not afraid to twist arms to get what it wants. Thanks for the tip, Sea Urchin!

[Source: The Wall Street Journal]

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    • 1 Second Ago
      • 5 Years Ago
      China, copying things? Say it isn't so.

      Fact is, they have been given a LOT of leeway by the WTO, and it's about time the tables were turned. If China wants to sell anything they make to foreign markets, they should be forced to partner with local businesses, and any technology they have (that actually is not taken from others) will have to be shared. Failure to do so should result in a 50% tariff.
        • 5 Years Ago
        Not news at all, in fact this is not nearly as bad as what happened in high speed rail technology. Siemens was kicked out of the initial round of bidding to supply 250kph train sets because they refuse to share current technology, Japanese, Canadian, and the French gave in and they were all awarded contracts. Later during bidding for the 350kph high speed rail bidding Siemens was more than happy to share almost everything they know, and became the sole winner of the contract. So at the end of the day revenue will win, it always will be, it's not something little people like us can control.
      • 5 Years Ago
      What military tech do they lead in? They just hack into US/UK networks to steal information. You can never lead if you steal.
      • 5 Years Ago
      Man I hate China ... For yet ANOTHER reason.
      • 5 Years Ago
      There are no secrets about an Electric Vehicle.
      It's so simple, just solder a few batteries together and connect them to an electric motor. Even amateurs have been doing it for decades.

      The technology of producing batteries that last for long time is a different story. Probably, the Chinese can go to the nearest laptop factory and steal it there.
        • 5 Years Ago
        You're joking, right?
      • 5 Years Ago
      This looks like blackmail to me. How China will get away with me is beyond me. I they can pull that off, the future of the free world is in trouble. What the world should do is boycott all Chinese products. It may come to that.
        • 5 Years Ago
        I completely agree, but how do you convince the mindless drones in the wal-marts to stop doing it?
      • 5 Years Ago
      Allowing China to buy partial or whole stakes in companies for the technology is absolutely fine except for one caveat: Nobody want the Chinese to own them. The U.S. Congress put a stop to that very quickly (remember Unocal and Macy's?). How can you blame someone for stealing when foreign firms want to only expatriate Chinese consumer's money without any downside?
      • 5 Years Ago
      Anybody who believes that the Chinese government can be an ethical business partner is simply kidding themselves.
      • 5 Years Ago

      China is going to be a much bigger pain in the arse',,,,I'd give them squat. If the greedy types that have gladly gone over to China for the cheap labor cost windfall could get their heads out of their collective wallets,,,,,and get together before they're really screwed by China they could kick them in the arse'.

      Please, no racist China talk - this is all about power and greed - bought anything made in China lately? Of course we have every friggin' day - bought anything made in the USA lately? Good, keep doing that, because that's all anyone can do unless someone in DC has a huge 'brain-fart' and actually changes a foreign 'trade' policy that has us getting lower wages, etc., etc., blah, blah, blah.
      • 5 Years Ago
      The problem is we can't do anything about China. How can you get tough on a country that owns most of your debt? What do you think would happen if China stopped buying our debt?

      And don't try to blame this on Obama there has been a defict since before I was born 40 years ago.

      China sadly will become THE Superpower in the next 50 years. And it will take 50 years to have no deficit but I'm betting we still will.
        • 5 Years Ago
        They own less than 10% of our debt, actually Japan and Saudi Arabia are right in there too. And there are a lot of things USA can do to be less dependent from China (mainly start using same tactics that China is using on foreign companies plus there are always tariffs/taxes and a lot of other 3rd world countries waiting in line to open up USA factories) and its not like China will attack USA because they don't have a chance as USA is still tens of years ahead in military technology. Don't believe in everything that Chinese government says, a lot of their numbers are definitely inflated and USA doesn't get the credit it deserves to get, two interesting articles to read:

        http://www.politico.com/news/stories/1109/29330.html and http://mjperry.blogspot.com/2009/12/us-remains-largest-manufacturer-in.html

        Chinas economic success isn't due to Chinese policies but constant foreign investments since 1970s. If it weren't for US/Europe, China would still be a 4th world country (and in many spots it still is). Even through copying, you will not catch up to Western world within 10 years. USA has a lot of problems right now but in the future China will have a lot more, mainly demographic and lack of natural resources to make their economy grow at current rates and to make their entire population happy. It's not like the entire world is sleeping.

        • 5 Years Ago
        On the flip side, China can't afford to just let the US die either, because it's so vested economically. If China just dumps all of the treasury bonds, and the US economy tanks, that kills their biggest export market. China would need a much stronger domestic market to survive a crash of the US market.
      • 5 Years Ago
      No need to force. Foreign companies come to share their tech with china themselves..

      Nissan Discussing Technology Transfer With China Partner

      Daimler and BYD Move Forward With Electric Car Partnership

      SAIC, Robert Bosch and Samsung SDI partner for electric cars

      GM Moves Advanced R&D To China
      "The CATC will focus mostly on new propulsion systems, gasoline alternatives, electrification systems and new engines and battery cells."

      • 5 Years Ago
      Here's an idea... Form an alliance with another company outside China first. Then take that new company to China for joint-venture. This way, you sort of a firewall, if you will. Or another way is to have a joint-venture with Taiwanese company before going into China. China thinks Taiwan is part of China.... So that wouldn't make it foreign, right? (Not being political here, so don't flame me.)
      • 5 Years Ago
      Really? I live in China but I have never heard this piece of news...
        • 5 Years Ago
        Of course you haven't your government won't let you.
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