US company wants White House to reconsider US-China trade relationship

In case you missed it, a US firm that sells wind turbine design and engineering services has asked Obama to take a second look at the US trade relationship with China.

AMSC, which claims Chinese (non-cyber) theft of its intellectual property has cost it $800 million, has “called on President Barack Obama’s administration and Congress to re-evaluate the U.S. trade relationship with China.”

The US is suing China wind turbine maker Sinovel Wind Group, charging it, two of its employees and an ex-employee of AMSC with stealing trade secrets. In 2011, AMSC said it wanted to recover $1.2 billion in damages.

AMSC Chief Executive Officer Daniel McGahn said: “The fact that Sinovel has exported stolen American intellectual property
from China back into the United States – less than 40 miles from our global headquarters – shows not only a blatant
disrespect for intellectual property but a disregard for international trade law.”

These cases are important because they show the trend of US lawsuits piling up in this area. The bigger question is whether they will be effective over the longer term. Even if they aren’t, it at least shows how the grievances of US companies having their inventions and data ripped off is being etched into US court records.

Bigger question: is the law any match for the scale of this theft, especially that which occurs online?

It’s a legal-technological-diplomatic- and even cultural issue between China and the West. If legal protections on inventions cease to matter, which way does the global economy drift?

Australia gets its Mandarin-speaking, China expert prime minister back

…at least until mid-September, when Labor party leader Kevin Rudd faces off against the slightly more China-wary Liberal Party leader Tony Abbott in the Federal Election.

Kevin Rudd’s comments to US Sec’y of State Hillary Clinton were released in the Wikileaks Cablegate data dump. In them Rudd said nations should integrate China into the international community, ”while also preparing to deploy force if everything goes wrong”.

I wonder if the PRC will welcome the leadership change in Australia. They certainly know Kevin.

 

Balkanization of internet, Balkanization of technology, and Ed Snowden

Network

 

Even as the search for Snowden continues, the impact of his data bomb is rippling across continents. Bloomberg reports US company Cisco may face a backlash in China as the media urges industry to shift away from US made routers and switches in favor of locally produced ones. 

From Bloomberg: 

China should develop its own Internet technology, the Global Times newspaper wrote in an editorial this week, alleging that the U.S. can “attack China almost at will.” U.S. companies, including Cisco, represent a “terrible security threat,” China Daily reported, citing an industry source it didn’t identify. Shenzhen-based Huawei Technologies Co. is poised to benefit from any clients seeking Cisco alternatives.

 

And the US government has banned federal agencies from buying Huawei an ZTE equipment. Rather than a Cold War with a world divided by a wall or a political border, it’s a world with considerable cross border trade and travel. Yet the closer you get to the power blocs, the more dense the web of business and political allegiances. I imagine that circularity of the trade and trade allegiances between businesses and states will grow. And then you’ll have some countries that use both Cisco and Huawei equipment side by side.

More dust kicked up by Snowden

One of the most interesting elements is coverage of the fact that China is installing Chinese-made routers because of the threat posed by foreign equipment.

From the SCMP:

Fang Binxing, president at the Beijing University of Posts and Telecommunications and widely believed to be the father of China’s “great firewall”, which restricts access to the web, told News China in October last year that foreign equipment was a serious threat to national security.

“China should set up a national information security review commission as soon as possible,” he said.

Telecom companies have started replacing foreign-made equipment.

China Unicom quietly replaced all Cisco routers at a key backbone hub in Wuxi, Jiangsu last year, according to the National Business Daily.

The changes are being kept quiet to avoid panic and embarrassment to the government, people in the industry say.”

Sound familiar? A very similar debate is happening in the US and Australia about whether equipment created by Huawei and ZTE can be trusted from a national security standpoint in the US and Australia. The fact that both China and the US (and Australia) see this as a threat, is yet another step toward the balkanization of technology.

No one disputes there is a balkanization of the internet. But ultimately, the a large swath of the underlying equipment may become balkanized.