Wednesday, 17 October 2012

Chinese Copyright – An Oxymoron?

Let me start by saying that I’m not into China bashing. I think that in many cases China has become a scapegoat for western governments for problems that we have created ourselves through greed, jingoism and whole bunch of other things that are not really the point in this post. 

However, one thing that has annoyed me a bit about China is the lack of copyright enforcement. For me it’s one of the biggest examples of China’s supposed “cheating” when it comes to international trade.  

Now I’m not talking about home software or downloading films here. I personally don’t mind if a person who doesn’t have the money downloads an illegal copy of my book. Besides, most Chinese would not be able to afford a real copy of windows and would not buy a full price DVD (or my book) if it was available to them; the relative costs are just too much. And on that side of the argument publishers and producers only have themselves to blame. 

For me the unfair part comes once we starting getting into companies, schools and other institutions. I’ve worked in four or five different schools, both public and private and not once have I seen a legal copy of software. In fact, once, when I was at the computer science department, I found an illegal copy of “XMLspy”. This is a product I was involved in developing when I lived in Austria. From what I’ve read and seen such piracy is common place throughout China. The book we had in the computer science department quoted the illegal software figure at over 90% of all software used.
Now I think China could have been forgiven for this ten years ago. But in the current state of things where China is rich and there are massive trade imbalances, it seems pretty unfair. 

If you think about Altova, the middle/small company that I worked for in Austria. They’re spending a lot of money to develop that product, but getting nothing back from it. Yet some people in China are using it to make money from Austrian companies – possibly even Altova - through the products they manufacture. It’s a one way flow of cash for a two way flow of goods and services.  

Moreover China has started moving in on creative industries as well, not just manufacturing. So who can create a cheaper application? The Austrian company that has to pay thousands for software licenses or the company that’s getting them for free? In this case the Austrian company is effectively subsidising the Chinese company by paying towards the development costs of the software. Without the one company paying, there would be no software for either.   

 And it’s the same for all industries. The light bulb factory in Scotland has to pay its share of fees for software licensing, while the Chinese light bulb factory can use the products for free. It’s small part of the reason China can make cheaper bulbs. It’s especially hard for start up businesses where technology costs are can be a large part of the start up fees. It’s not a fair contest.

So what can we do about it? Well for a start governments have to start raising this issue with China more. In my admittedly limited experience with Chinese people is that if you stand up to them in a firm but polite way then you will get results. Not taking action seems to be seen as a green light to do something even when saying not to.  Although I do wonder how much control over ground level issues like this the government of China really has.

What’s really needed is a change in the mindset of the Chinese people – no easy task. And the only way of doing this is education, which is something that the Chinese government has to be on board for. But why wouldn’t they be?
The thing is, it’s not just in the West’s interests to improve the copyright law. It’s in China’s interests as well. If the reports I’ve read are true, China is trying to move away from its manufacturing focus and trying to develop its creative and service industries instead (or possibly as well as). But is anyone going to open a software company in place where they know that they will make no money for their products? Is anyone going to spend millions of investment in new technology only to have it stolen and sold for a fraction of the price? 

Moreover, I think of my students in the computer science department. What jobs are there going to be for them in the future? Sure there will be some large scale developments and governments or military jobs, but that’s a small number of positions  compared to the number of graduates. Most, with their high education, will probably end up doing menial jobs in factories far away from their homes to pay the rent.

Frankly I don’t think there is a simple solution to this problem. But inaction is certainly not the way to go. Raising the issue with China is a start, but it means little without reciprocal financial punishments. On the other side, software companies have to start charging reasonable prices, based on an international mean for their products, so as not to keep pricing companies in low wage countries out of buying. Maybe with these and some other changes we can come to an agreement on a fair way to deal with copyright.   

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