If the Chinese are doing as you say, which they might be doing already, they would not go about broadcasting this. After all, there still would be repercussions for companies selling their product outside of China using this equipment. If this was done quietly, no one would be the wiser. I would not be surprise that this is already underway. How would a Western company even be able to get the evidence to file a claim?
A reappraisal of China's semiconductor strategy
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If the Chinese are doing as you say, which they might be doing already, they would not go about broadcasting this. After all, there still would be repercussions for companies selling their product outside of China using this equipment. If this was done quietly, no one would be the wiser. I would not be surprise that this is already underway. How would a Western company even be able to get the evidence to file a claim?
Broadcasting this does have its benefits. Formally declaring a set of foreign patents crucial to national security eminent domain will give Chinese investors (and even foreign investors) confidence that if they invest in technologies based on these patents, they will be protected from lawsuits in China. It lends the enterprise an air of respectability - after all, the US wields "entity lists" and "sanctions lists" all the time, why shouldn't China wield an "invalidation list"? If this is done in the dark, investment will be far harder to attract since the attitude of Chinese law to these technologies would be ambiguous.
Chinese semiconductor imports exceed $200 billion annually, and although a large fraction of that is packaged into electronics for export, a much larger fraction stays in China. So there's an enormous purely domestic market where foreign IP laws aren't a factor. There is the further consideration (which you note) that in the case of ASML, the reverse-engineered photolithography machines aren't themselves destined for export, their products are.
Neither would I. In fact, I speculate that this is the essence of Huawei's "spare tire" program.
Attracting investors is not the primary bottleneck for getting this going. The Chinese does not lack capital and would be able to fund the development by themselves. At this juncture, there is no need to add ammunition to the American propaganda machine. The important thing is to get the job done. I suspect Huawei has 1-2 years of spare parts in stock. I think the Trump administration just gave 100 days to ease the pain for the U.S. companies, it will allow them to add to that stock. At the end, the impact will be much more muted.
In fact, that is the reason why rare earth element should not be used as a weapon by the Chinese, I suspect countries like Japan and the U.S. also have years of stock of the stuff just in case this happens.
At some point it will be. I am a strong believer that the government and other public institutions have an indispensable role to play in developing technology, but they can't be responsible for everything; nor should they be. At some point market forces are going to have to play a role, and for markets to properly function they need a sound and predictable legal framework.
Certainly, but more capital is always welcome, and I find a delicious irony in Westerners investing in their own "stolen" technology.
They're going to baselessly slander China anyway, and their slanders are believed broadly. Why not add some basis to their slander? More seriously, doing this in the dark like a furtive thief is what will draw slander. Standing tall and proclaiming your position and its justifications might draw their anger, but they're already angry, and right-thinking people will see the justice inherent in China's stance. The proper response to American propaganda is equally effective and loud Chinese propaganda (another difficult problem), not slinking away into the shadows.
That was more me playing around with a prevailing idea for retaliation, I don't consider it a serious proposal like my idea about invalidating strategic patents. Still, if it's considered then the Chinese government should certainly commission studies and intelligence-gathering activities about enemy strategic stockpiles, production feasibility and schedules, etc.
It is a bad idea to totally ignore IP laws. It was one of the reasons why the Soviet Union couldn't import Western technology. The Nene jet engine being one case where that happened. The Soviet Union basically mostly ignored patents.
Which does not mean China shouldn't take care of its own interests.
Which does not mean China shouldn't take care of its own interests.
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I cannot agree with you more, however, in the grand scheme of things, litho machines and EDA tools is a very small part of the picture. If it is strategic, then you would do it in a way that still minimize damage.
While it feels good to swagger about making this proclamations, we must not forget also that there is a negotiation going on. While the Chinese have a propaganda machine to take care of the home crowd, they have been pretty subdue to the Western press. That is because Trump needs to appear as a tough negotiator that comes out way ahead. Allowing the other side to have the appearance of winning is a chip on the negotiation table and the Chinese would be stupid to throw it way by doing the feel good swagger.
So far, with the exception of screwing his own much weaker allies such as Canada and Mexico, he has not gotten much traction with his foreign policy. The North Korean deal, failed. The Venezuela coup, failed. The Syria situation, failed, though mostly not his fault. I predict that the Iranian threat will also result in failure. This is because Trump's ego got in the way. He always wanted the maximalist position. However, if you negotiate with the North Koreans about giving up the tools of their own survival, the best you can do is a deal that give you the appearance of winning. Negotiating with the Chinese is similar. The best that Trump can do is to have a deal that give him the appearance of winning. With their future ascendancy and prosperity on the line, the Chinese will never give up the basic formula that got them so successful and evoked so much fear from the West. I think some hard balls have to be played by both sides to see who comes out ahead. While I am not a gambling man, I would wager that the Chinese have worked through all the angles and curve balls while Trump seems to be improvising along the way. I think that after it is all said and done, Trump will come to realize the limit of his power and strike a deal. In the mean time, there will be fireworks and theater.
AssassinsMace
Lieutenant General
Well Trump is apparently pulling a tad back on restrictions on selling to China claiming to give a grace period for US companies to adjust. That usually happens for companies to find alternate sources. How when you're the seller does a grace period help to find... alternate buyers? This is another case where Trump is getting drunk thinking he's given China a huge blow to brag about by denying them US products he thinks China needs and forgetting that at the same time US companies just lost their largest customer in the world for their hardware.
Yes, this goes along with my assertion that Trump seems to be improvising along the way. It appears that the Chinese have dug in their heels. To dislodge the logjam, he pull the Huawei without thinking through all the implications and had to back away after the Chinese threaten to counter him with a play of their own. I think after the ZTE deal where he also pulled back from the brink, it is unlikely that he did not know it would harm the American companies, but that was a sacrifice that he was willing to make on their behave. I think the Chinese must have threaten him with some counter moves, which we will never learn of. Let's see if a deal appears quickly, say, in June. If not, that would correlate with my assertions.
Jura The idiot
General
here's a good one:
'China to cast off the chains of international IP', LOL
manqiangrexue
Brigadier
I'm sorry, who the hell is "we?" You said you were European.
I really think you should stop trying to convince Chinese people that everybody's all friends and China should become MORE DEPENDENT on others to integrate into the international community. It's... for lack of a better word, insanely stupid.
In case you haven't noticed, China is one of the big three encompassing Russia, China, USA. These 3 countries are not one of the guys; they hold the potential to be the world's most powerful nation, and that is what they fight for. Dependence is sometimes a temporary necessary evil but certainly never a goal.
After being repeatedly threatened to have critical components withheld from its top tech companies, China should become more dependent? Are you joking? What's next, pull a Ghandi and starve ourselves to death for pity? Chinese people don't do that; that's not our style. When the US threatens China, it is a reminder to close up a weakness, only that and nothing else. If you like dependence, keep it for your own country; nobody's buying it here.
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