Since Chinese EV manufacturers “poach” Western designers, many people might assume that only the Chinese are stealing product ideas and intellectual property. But in the world of EVs, we’re actually starting to see the Chinese innovate (out of competitive necessity) and Western EV manufacturers starting to “borrow” stale Chinese designs. . . .I think the real rationale for the tariffs is that the US EV industry — and the Japanese and Korean automakers that have US manufacturing operations — just doesn’t have very competitive offerings on the market. Therefore, the US has made the strategic decision to prioritize building a competitive EV industry at the expense of the American consumer in the short-term.
China’s huge surge in renewable energy, above all in solar power, actually puts us on track for the first time to meet these objectives. As Ember reports it has taken experts around the world by surprise:
Each year the IEA has upgraded predictions: from 2021 to 2022 to 2023 the IEA’s accelerated case scenario predicted that 2023 annual additions would be 218 GW, 257 GW, and 406 GW, respectively. With recent updates from China, the actual additions for 2023 are 444 GW according to BNEF. To put the scale of additions in 2023 into context, annual additions of solar capacity had not broken 200 GW per year until 2022, which itself was a record year.
Having shattered all previous experience of renewable power rollout, China’s huge surge in solar now actually puts us within striking distance of achieving a net zero path, driven by green electric power. . . . What we are witnessing is the most rapid take-up of a significant energy technology in history.
The response of Western politicians? Protectionism. Of course there are complex motives. They need to build coalitions to sustain the energy transition. They are worried about the CCP regime in China. They want to escape extreme dependence on imported sources of energy (though of course in the renewable space it is capital equipment not energy they are importing). But the more basic question is simply this. Are Western government and societies willing to prioritize the energy transition if it is not their drama, not their success story? Or, if the PV panels and the electric vehicles are from China, do other interests take priority?
The final piece in the “we wuz robbed” argument is the claim that Chinese companies “steal” the I.P. of their American partners in joint ventures. China’s prowess at the negotiation table is undeniable, and it wields its bargaining power aggressively to trade access to Chinese markets for learning. Yet the American companies that claim to be victims enter into these agreements freely and rarely come out net losers. These U.S. businesses have raked in trillions in sales and pocketed hefty profits—a testament to their ability to navigate the competitive landscape.
The hawks vastly overestimate the value of any I.P. that can actually be stolen. Clueless about the technologies that most concern them, the hawks fixate on the blueprints without appreciating the craftsmanship required to bring them to life. After all, the secrets of technological innovation aren’t hidden. The recipes for making microchips have been available in university libraries for almost 70 years, but building them takes far more than just following instructions.
READER COMMENTS
Jon Murphy
Jun 15 2024 at 11:40pm
Even then, not really: the US banned Chinese immigration because they were going to outcompete our workers (Chinese Exclusion Act)
Warren Platts
Jun 17 2024 at 5:27pm
That is not even true. The USA, thanks to Pearl Buck, has bent over backwards to help out the Chinese empire for over a century now. If it weren’t for the US of A, the Japanese would’ve taken over the whole place (probably would’ve been for the best). And since 1972, we’ve done everything we can to build up the Empire economically. And for thanks, we get chemical & biological WMD attacks that have killed 2 million American civilians so far.
Scott Sumner
Jun 17 2024 at 7:28pm
“And for thanks, we get chemical & biological WMD attacks that have killed 2 million American civilians so far.”
This absurd claim is exactly what I mean by anti-Chinese bigotry. Thank you for confirming my claim.
MarkW
Jun 20 2024 at 12:55pm
Given what the Japanese did in China before and during WWII, this “If it weren’t for the US of A, the Japanese would’ve taken over the whole place (probably would’ve been for the best)” is even more offensive.
He is right, though, that before Mao’s victory, the US and China were actually allies and might be again.
Robert Benkeser
Jun 16 2024 at 1:15am
I don’t have a problem with Chinese innovation. I have a problem with China siding with Russia, Iran, and North Korea. Did the West force China to make this choice? Nope. China made the decision itself.
The fact that China is by far Russia’s most important ally right now speaks volumes. Any country siding with a genocidal imperialist regime should rightly be viewed with suspicion that their innovations will one day be used to kill Americans.
Alexander Search
Jun 16 2024 at 2:27am
I agree.
The greatest obstacle to the acceptance of the Chinese people by the West isn’t the West — no matter how humanly errant Westerners are. The greatest obstacle is, rather, the cadre of CCP strongmen ruling over the Chinese people. Much of the West’s hypocrisy is a reaction (not justifiable, but understandable) to the security and ethics concerns raised by CCP aggression.
raja_r
Jun 16 2024 at 9:11am
“Any country siding with a genocidal imperialist regime should rightly be viewed with suspicion…”
What do you think of America siding with Saudi Arabia, Pakistan, Egypt, etc? Don’t you think other countries might have similar reasons to ally with authoritarian nations?
john hare
Jun 16 2024 at 4:32am
One of the things I find disturbing about the “China stole it” meme referring to intellectual property is the ignorance of the extent to which all innovation is built on that which has come before. The first thing an innovator should do is become familiar with prior art in the area of interest. Historically, there has been idea theft since forever. Going back to chipping flint for a hand axe, one learned from what had gone before’
The US 1903 Springfield rifle was a near exact copy of the German Mauser rifle. Military hardware over the last century is full of similar examples that are fairly easy to find. Those examples don’t go one way, or even two ways. Copy and innovation based on other innovation is a chaotic weave of interactions.
Or one can look at the intellectual giants of science. Newton, Einstein, and company had a rich history to work from that doesn’t detract from their own genius. The Wright brothers were the first in powered controlled flight, and learned from the thoughts and mistakes of others in prior attempts.
If I am passionate about this it is because I am an inventor myself and would be intellectually paralyzed without having the work of others to build on.
Scott Sumner
Jun 16 2024 at 2:22pm
Good points. Copying the IP of others is essential to human progress.
steve
Jun 16 2024 at 3:51pm
Building on the ideas of others or trying to re-create stuff others have done has been historcially acceptable. Outright theft of ideas and claiming it as your own has not. Note that Mauser received a large cash payment for having its design copied.
I think the better point is that as Scott noted is that by and large executives negotiated away that IP so that they could have huge salaries and their companies have big profits. American consumers also had some benefits but it’s not clear if this was just short term and will have negative effects in the long term.
Steve
Jon Murphy
Jun 16 2024 at 3:54pm
What evidence do you have to suggest this is the case? Theory suggests it’s unlikely (one wouldn’t reap large profits by giving up monopoly power). Further, given how robust IP law is in this country (lawers make a lot of money on IP lawsuits), it suggests that companies are not being blasie about IP.
Andrew_FL
Jun 16 2024 at 2:23pm
One of the most impressive examples of Chinese innovation is Vine with Spyware Characteristics?
Jim Glass
Jun 18 2024 at 2:31am
China rehearses a blockade of Taiwan with state media bragging it shows how the PLA can turn it into a “dead island” … what’s happening right now with the Philippines? … China announces it is doubling its nuclear arsenal – after the PLA releases a video of it bombing Americans in Guam (a simulation, happily) …etc., one can create a long list of such things. Maybe our national security and that of our liberal democratic allies really should be considered a thing.
“We” here being very expansive. Europe is far ahead of the USA in launching a major trade war with China — big new tariffs just last week. (The Biden tariffs affect all of $18 billion of $427 billion of imports from China. That looks more like election year posing than substance.) And then there are nations around the world that China is supposedly trying to win into its camp — Brazil, India, and South Africa of the BRICS have started trade actions against China, as are a growing list of countries in Latin and South America, etc. So don’t claim any ‘American exceptionalism’ about this.
This isn’t Japan disrupting the world auto market in the 1980s. This is the world’s #2 economy as a matter of permanent policy holding its domestic consumption 10 points of GDP below the world norm while pushing its production on the order of 10 points above. (And it’s not just EVs and solar panels.) Arithmetic tells that this must have growing effects in labor markets in countries around the world that governments do not like.
China’s economy accounts for just under 18 percent of global GDP, after the United States, which accounts for about 25 percent. But China comprises only 13 percent of global consumption and an astonishing 32 percent of global investment. [FN]
That difference between 32% and 13% of GDP producing for export. So “we” are the world here. Personally, I’m all for predatory free trade. If another country wants to make a bad deal offering me subsidized stuff, I say “gimmee!” But no matter how ‘free trade’ you are, *common sense* must tell you this can not go down smoothly in world trade politics, as indeed it isn’t.
Even more impressive has been Xi’s innovation in reviving the CCP as a Leninist regime — complete with rehabilitating Stalin, and condemning Khrushchev and the other post-Stalin Soviets as examples of weakness to be shunned by the CCP at all cost.
I’d imagine that this by itself — a regime ruling a nation with 1.4 billion people, and the world’s #2 economy, going hard-Leninist, holding up Stalin as a model! — among libertarians of all people (!) would be a matter of concern and discussion, just on its own merits. Apparently not, but even as to just the trade issues above, it matters.
[] Are “national security” trade restrictions justified by the CCP’s growing aggression towards its neighbors? What were the foreign policy objectives of Lenin and Stalin?
[] Is the China-trade problem just competition, or is it structural imbalance and going to get worse? Leninist economics 101: maximize production-minimize civilian consumption. It’s why the Soviets had ICBMs and Cosmonauts before their citizens had toilet paper. It’s going to get worse.
Moreover, the Financial Times today reported that Xi is telling people that the US is actively trying to provoke war with China, as “a trap” to set back China’s advancement. (Which reading history will show is how Leninists think.)
And how might that turn out as to trade?
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