American Made In China

U.S. Tech is Being Copycatted

Ryan Pyle / Corbis via Getty Images
Four different sizes of imitation Apple iPhones on display at a mobile phone market, popular for selling imitation and counterfeit phones, in Shenzhen, China.

Imitation is often called the greatest form of flattery, and while it can be to a certain extent, it often loses its allure when it comes to billions of dollars in economic damages and hundreds of thousands of lost jobs. The brazen theft of intellectual property, copyright infringements, and general discriminatory trade practices tend to fall into the latter. As President Trump said on the campaign trail, when referring to the commercial relationship between the U.S. and China, “it's the greatest theft in the history of the world what they've done to the United States.”

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Data from the Wall Street Journal
China is by far the largest counterfeit market.

The Chinese economy has greatly evolved over the last few decades. Starting in the 1980’s under the leadership of Deng Xiaoping, it opened itself to investment and trade with the West. Seemingly overnight, factories and skyscrapers appeared in Special Economic Zones, regions that operate under less stringent regulations making them more attractive to foreign investors. One such example is Shenzhen, just north of Hong Kong, which until recently was farmland.

Around this time, Chinese exports gained the coveted trade status of “most favored nation” allowing them unfettered access to U.S. domestic markets. This continued under the Clinton administration when controversially China was admitted as a full member of the World Trade Organization (WTO), further legitimizing its trade practices with the organization’s 164 other members. 

In a little over a quarter of a century, it went from manufacturing 3% of the world’s goods to 25% of them. Since joining the WTO, it has also seen a 504% rise in the number of U.S. goods exported to China. One of the leading exports to China was intellectual property, such as computer trademarks and software. While the market dominance of China may be sturdily rising over the past quarter-century, this has not been without controversy. China has been accused of ripping-off U.S. goods, specifically technology and intellectual property.

One of which is Goojje, a knock-off version of the internet search engine Google. In 2010, Google even threatened to leave China over tight regulations and an increasing number of cyber attacks. HPhone, APhone, and IPed are a few other examples of knock-of technology. They are made to look like Apple’s iPhone and iPads, and do look the same on the outside, but run on a much cheaper software. In addition, there have also been stores marketing themselves as Apple stores opening all across China. 

Chinese companies of all levels, from small startups to market giants to state-run companies, have been accused of participating in stealing intellectual property. In 2013, six Chinese officials were caught stealing genetically modified corn from Iowa to send back to China.

China is not the only country guilty of intellectual property theft. Many European nations participated in some sort of espionage that resulted in the theft of intellectual property or other ideas in the 19th century, and some historians argue that these practices led to their role as innovators by the 20th century. 

In April, President Trump and Chinese President Xi Jinping met and discussed the future, planning to bring more clarity and security to American companies in China. It might just be a matter of time before China makes the shift from imitating to innovating.

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