Small progress in US-China talks

The Strategic Economic Dialogue talks have concluded, to be resumed in another 6 months. Judging from Business Week's report, not much was gained by the US; but then, China is negotiating from a position of considerable strength. She's only doing what we would do in her place. Interesting that there were extra talks afterwards.

But America's indebtedness is also a challenge for China and the rest of the world, in a different way. Richard Duncan's book makes it clear that making too much money in international trade is perhaps as big a problem as losing it. More about this soon.

More on Intellectual Property Rights in China

Have a look at this business guide from the US Department of Commerce, for companies wishing to protect their IPR in China. Each country runs by its own rules, together with such international undertakings as it is willing to give; and China's approach to this subject is by no means unique; but it gives one pause for thought. Here's a couple of tasters:

On average, 20 percent of all consumer products in the Chinese market are counterfeit. If a product sells, it is likely to be illegally duplicated...

There are several factors that undermine enforcement measures, including China’s reliance on administrative instead of criminal measures to combat IPR infringements...

Patents: China follows a first to file system for patents, which means patents are granted to those that file first even if the filers are not the original inventors...

Trademarks: China has a ‘first-to register’ system that requires no evidence of prior use or ownership, leaving registration of popular foreign marks open to third party...

Copyright: Unlike the patent and trademark protection, copyrighted works do not require registration for protection...

As I said in an earlier post, there may be more to argue about on the first two headings. Yes, there is some system of investigation and redress, but it doesn't necessarily have the rigour and powerful enforcement that Americans would expect in the USA.

Wu Yi lays it on the line

Chinese Vice Premier Wu Yi said in her opening statement yesterday, "We should not easily blame the other side for our own domestic problems. [...] Confrontation does no good at all to problem-solving."

Tough, but true, and tough. The press weren't in on the whole two-day session, but this kind of sets the tone, don't you think?

China and Intellectual Property Rights

One of the issues on the agenda at the Strategic Economic Dialogue between the US and China is action against copyright theft - see the CNN article from last week for a discussion of the problem.

But China is not only acquiring the custom and capital (even the factories) of the West: she is also very keen to catch up on know-how. The arguments at the moment may be about pirated music and videos, but I wonder whether industrial patents and designs may become a bone of contention in the future. I can't think it is safe for the West to watch its physical production processes migrate abroad, consoling itself with the thought of licensing the use of its inventions.

US-China "Strategic Economic Dialogue" resumes

We're waiting to hear much from the Western side on the talks, but see here for a Chinese-angled general background to the series. However, this one from China View is more frank about the differences between the two sides.

Pakistan's Daily Times gives useful detail on the economic issues: US manufacturers are calling for further appreciation of the Yuan against the dollar, but "an international think tank, Oxford Economics, estimated that even a 25 percent revaluation of the yuan against the US dollar would decrease the total deficit by only 20 billion dollars after two years."

For the American side, it must be like an uncomfortable meeting with your bank manager.

China puts Blackstone in its shopping basket

And the day before the next round of US-China trade talks starts, the IHT reports on the purchase of a $3 billion minority stake in private equity firm Blackstone Group. Nice timing.

Protectionism dressed up as concern for worker's rights, the environment

The Detroit Free Press reports on new terms of trade set by America which require that Panama and Peru "...maintain and enforce five basic international labor standards: freedom of association for workers, the right to collective bargaining, and eliminating forced labor, child labor and discrimination in employment." They must also "adhere to environmental protection standards in their manufacturing."

Next in line for this treatment is Korea - but will such terms apply to China? Don't expect too much, Motown: remember Vice Premier Wu Yi's warning two days ago - "Attempts to politicize trade issues should be resisted." Wait till China's car industry really gets going.

Meanwhile, let's see what transpires in next week's resumption of the Strategic Economic Dialogue talks between the US and China, for which Wu Yi's Wall Street Journal essay on May 18 is an advance keynote-setter. Since she'll also be representing the Chinese side there, I don't expect much to be decided in America's favour.

China: a turning point?

Please read this news article, about US-Chinese economic relations. It's a rehash of an essay by China's Vice Premier Wu Yi in yesterday's Wall Street Journal. To me, the very polite tone and careful emphasis on mutual benefit make it clear who's wearing the trousers now. The subtler they are, the more they mean it.

Listen with your inner ear to the statement "Attempts to politicize trade issues should be resisted," bearing in mind who is making it. I sense some kind of turning point. If you play the oriental game Go, the term is "sente", meaning that the initiative has passed to the other player.