ugg pas cher-Protecting Intellectual Property Rights In China

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Protecting Intellectual Property Rights In China
A major global think tank asked my opinion on the challenges of entering the China market for international companies for a white paper that it is currently preparing. Although many books have been written on the subject, important topics like this are worth revisiting from time to time. After all, the China market grows more compelling by the day, drawing more and more companies into the discussion, and China does change. What is true today may not be true tomorrow.
At the top of everyone's list of challenges, and the topic I am asked about most frequently, is the question of how a company can protect the technology it brings to the country. When combined with the lack of legal enforcement, the issue of protecting intellectual property rights (IPR) is the single biggest hurdle for most companies to overcome when thinking about entering the China market.
My answer to companies puzzling over this issue has several aspects. Before addressing the broader issues, I point out that there are a variety of ways to protect technology in China. None, of course, are foolproof, but taking certain precautions can substantially lessen the risk. For example, setting up a wholly owned foreign company where possible to manufacture the product, rather than entering into a joint venture, provides more control over who has access to the technology and know how. Breaking the manufacturing process into several discrete operations that are located in different facilities can prevent any single group of employees from seeing the whole process. Another good way to prevent technology leakage is to manufacture more components, where much of the technology is contained, in house, rather than outsourcing.
Beyond the tactical suggestions,ugg pas cher, there are two broader issues that I raise. First, I ask if the company can really afford not to bring its products to China. Secondly, I emphasize that China is evolving in technology and innovation, and that provides a measure of hope for all technology owners. manufacturer of specialty engineering equipment several years ago. When I called on the appointed evening from my home in Beijing,bottes ugg femme, the CEO told me that his company had more than a 50 percent market share in the United States and had begun seeing strong interest in its products from China. The company had hired an agent,moncler pas cher, a Chinese national, to develop the market, and the company's export sales to China were growing as a result.
The CEO wanted my opinion as to whether he should begin thinking about setting up a manufacturing facility in China. Before I could answer, I had a question. "How much do you think your revenue opportunity might be if you manufactured in China?" Straight off, he said,moncler soldes, "I think we could do as much as $40 million per year."
Hearing that, my advice was clear. "If the market is that big in China for your product, you'd better start producing here," I told him. I then went on to explain. "Your product is a labor intensive, assembled product. With transportation and duties,ugg bottes, the imported price is already pretty high. And given the high labor content, there's plenty of room for a Chinese company to reverse engineer your product and sell it for a great deal less." He immediately saw the point and agreed,ugg pas cher, but I wasn't quite done. "Losing sales in China isn't your biggest problem if you don't start manufacturing here," I added. "How long do you think it'll be before your Chinese competitors begin to eye the market, and those higher prices, in the United States? If you don't get over here, your 50 percent market share at home could also be in jeopardy."
Needless to say, this was a sobering thought which he hadn't considered. Silence can be deafening sometimes,ugg paris, and all I heard was silence at the other end of the telephone. I had just told him that,ugg france, in many ways, the decision to manufacture in China had broader implications than he had realized. As the CEO of the company,ugg australia pas cher, he needed to worry about a lot more than just the prospective size of the China market. The future viability of his company might very well be at risk if he didn't set up shop in the country. The CEO was gracious and thanked me at the end of our conversation, but I'm sure that I had ruined his day.
This same dilemma faces every company that has good technology and a large market share outside China today. If the company doesn't learn to compete with its upcoming competitors in China, it may soon be battling these same companies on its own turf. The old football adage that the best defense is a good offense has plenty of application here.
There is a second, more hopeful, point that I always make and that is that China is changing. A Thomson Reuters research report,
Having lived in Beijing for almost two decades now, I've learned a thing or two about China and doing business in this incredibly fast moving country. In 1994 I founded ASIMCO Technologies, which became one of the most important companies in China's automotive components industry. In 2009 I decided to combine my experience in China with the skills I learned as an investment banker on Wall Street and founded JFP Holdings, where I am currently the Managing Director.
 
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