Saturday, April 21, 2007

If imitation really is the sincerest form of flattery…

Filthy LucreUnmitigated Gall

We ought to also consider the possibility that disingenuousness is the most obsequious form of lying.

imageFound while catching up with my overload of simultaneously delivered Economist issues, a story entitled ”Counterfeit cars in China“, and subtitled “The sincerest form of flattery”.

Of course, there have historically been regular instances of copyright, trade secret, and patent law violations in China. (Google search links, returning 1.3M, 287K, and 981K document hits, respectively). An argument can be made that such infringement is how third-world and emerging economies grow to become full players in the global market. That argument would ring true, however offensive the concept that “all you need to do to grow is to steal and learn”.

COPYING in China goes far beyond fake DVDs, watches and handbags. “We can copy everything except your mother,” goes a saying in Shanghai. Soy sauce with fizzy water passed off as Pepsi, fake Cisco network routers (known as “Chisco’s”) and mobile phones that look like the latest offerings from Nokia can all be easily found. So, too, can fake blood plasma.

Aside from the blood plasma (which I don’t understand how one might fake), the rest of it is all old news. Counterfeiters of high-value manufactured goods should be restrained by to the barriers to entry, including “huge capital investment”.

Of all the products to copy, however, a car is surely the most complicated. Cars consist of around 6,000 precisely manufactured components made from a range of different materials. For a car to be cheap, reliable and long-lasting, says conventional industry economics, these parts need to be put together in factories with huge volumes, lots of expensive machinery and many well-trained engineers.

Turns out that in China’s case, that’s not as true as might be hoped:

So it came as a surprise when counterfeit cars started to appear in China eight years ago. Early VW look-alikes were soon followed by the infamous Chery QQ. It appeared six months ahead of the car it copied, the Chevy Spark, because a Chinese firm somehow got hold of the blueprints.

All quite troubling, and it goes beyond the Chevy/Chery, affecting many other established manufacturers.


Posted by Patton on 04/21/07 at 10:18 AM
Filthy Lucre • Unmitigated Gall • Permalink