Death By China: really?

Posted on by Gilbert Van Kerckhove

The new Trump team

“Death By China” is again in the news. Sino-US trade frictions loom with Trump’s new pick for policy adviser, as explained in the SCMP:
Appointment of China critic Peter Navarro points to more bilateral tensions ahead, analyst says.
22 December 2016,
http://www.scmp.com/news/china/diplomacy-defence/article/2056678/sino-us-trade-frictions-loom-trumps-new-pick-policy

Peter Navarro

The professor is the author of “Death By China: How America Lost Its Manufacturing Base” (2011)
See the Official Version  of the documentary (in China you need VPN):

I did watch the entire documentary and can only say it is pretty harsh on China and at least a part of his statements are simply dead wrong, e.g. his take on Apple and Foxconn.
However he could find some supporters in the foreign business community for some of his criticism. Anyway Chinese officials better not simply dismiss the whole thing but instead have a close look.

More from Navarro

Peter Navarro is a professor at the Merage School of Business at the University of California-Irvine. With a Masters of Public Administration from the Kennedy School of Government and a Ph.D. in economics from Harvard, this distinguished macroeconomist has written extensively on Asia as well as lived and worked there.

crouchingtiger

His other book: “Crouching Tiger: What China’s Militarism Means for the World” (2015)
See: http://crouchingtiger.net/

It says there:
Will there be war with China? The Crouching Tiger book provides the most complete and accurate assessment of the probability of conflict between the United States and the rising Asian superpower. Equally important, it lays out an in-depth analysis of the possible pathways to peace. Written like a geopolitical detective story, the narrative encourages reader interaction by starting each chapter with an intriguing question that often challenge conventional wisdom. Based on interviews with more than thirty top experts, the author highlights a number of disturbing facts about China’s recent military buildup and the shifting balance of power in Asia: the Chinese are deploying game-changing “carrier killer” ballistic missiles; some of America’s supposed allies in Europe and Asia are selling highly lethal weapons systems to China in a perverse twist on globalization; and, on the U.S. side, debilitating cutbacks in the military budget send a message to the world that America is not serious about its “pivot to Asia.”

And so on.
Oh well, not planning to buy his book(s). Let’s see what he will really do. And good luck to him. He will need it.

Donald Trump battles China IPR

Posted on by Gilbert Van Kerckhove

The IPR area in China is a minefield

(second part on this issue)
If Donald Trump battles China IPR, he is not alone.

As quoted from NYT:
Mr. Trump has fought at least once to get his name back. In 2015, he lost a legal battle against a businessman in the northern province of Liaoning, Dong Wei, to prevent him from using the Trump name for a construction company, according to a website run by China’s Supreme Court. Then the decision was reversed. A notice issued on China’s trademark office website on Sunday said that Mr. Trump’s trademark had been granted preliminary approval for use in construction services. The Wall Street Journal reported the decision on Monday.
The situation highlights the difficulties that big brands and celebrities face as they navigate the country’s relatively new trademark laws.
In China, trademarks are generally awarded to those who are first to file with the government. That has given rise to a crush of people registering the names of well-known brands, in a practice known as “trademark squatting.”
Many Western companies like Apple and Starbucks have been caught up in long legal battles to win the right to use their names in China.
In May, a Chinese company won the right to sell its leather goods under the iPhone trademark after years of legal wrangling with Apple. Michael Jordan lost the rights to the name he is known by in China. New Balance paid $16 million in damages for what a court said was the illegal use of the Chinese name for the company, which a person had trademarked.

Donald Trump lost

Earlier, the South China Morning Post and CNBC commented on Trump’s fight to protect his Trademark, see:
“The day Donald Trump took on the Chinese government — and lost” – 14 Nov 2016
http://www.cnbc.com/2016/11/14/the-day-donald-trump-took-on-the-chinese-government–and-lost.html

No matter what course U.S. president-elect Donald Trump takes with China, he starts out with at least one loss in his tangles with Beijing authorities.
Despite waging a long court battle, Trump failed to trademark his own name in the construction industry on the mainland.
Yet it seems Trump’s surprise election win has begun to make a difference with the country’s trademark officials.
His application for a similar trademark in the same categories as before — with the only difference being the capitalized name, “TRUMP,” was filed on March 20, 2014, and provisionally approved on Sunday, four days after his win, according to the government-run trademark search system.

China’s IPR a real “Far West” (in the East)

Many foreign companies have seen their trademark stolen by trademark squatters. The Chinese government mostly let them do, blaming the foreign companies by not filing on time.
There are so many cases of this type and some foreign companies had to spit up millions of USD to … buy back their own trademark.
As I said before, some clever foreign lawyers should do the same in EU and USA and squatter on Chinese brand names before the Chinese have the idea to act. It already happened, but not enough. Then of course China was “angry”. Duh.

A typical case: Calissons d’Aix

See: French confectioners battle Chinese firm over Calissons d’Aix
16 November 2016
http://www.bbc.com/news/world-europe-38005875

calissonsdaixbbc

Excerpts
Angry French confectioners are preparing for battle over a sweet from Provence, after a Chinese company trademarked its name.
Calissons d’Aix are eye-shaped marzipan treats flavored with melon, and firmly associated with France.
But Shanghai-based firm Ye Chunlin snapped up the rights under the noses of the Gallic manufacturers.
Now the French Union des Fabricants des Calissons (Union of Calisson makers) in Aix is fighting to block the decision.
Calissons have had protected status in France since 1991, so any brand making them there has to follow set methods.

Chinese copying Chinese

Chinese copy anything, also Chinese famous brands
Just a week ago a Dutch friend saw these bicycles. Their logo reads JIANT. Oops. Doesn’t that sound like GIANT, one of the most famous bike brands here?

China still needs to act to clean up this IPR mess. Donald Trump had also a taste of it but might be lucky as – President.
Others are not so lucky.

Discover MaAnShan City in Anhui Province

Posted on by Gilbert Van Kerckhove

A fast trip

Remark: I normally use “MaAnShan” instead of “Maanshan” as it is more clear for the pronunciation
It was my second chance to discover MaAnShan City in Anhui Province.
On 10 November after lunch we went by High-Speed Train from Beijing to Nanjing South Railway Station, some 4 hours for some 1000 Km. We were picked up by car and we arrived in our hotel in MaAnShan after 45 minutes. It is the fastest way. The trains are very comfortable, especially in business class. With a cruising speed of 303 Km/h they are very quiet and extra stable. We came back on 11 November in the afternoon and were home around 9 pm. The Beijing South Station is gigantic and modern, looks like an airport. Taxi service to leave there is a disaster so we took the subway instead. The Nanjing South Station is also modern, see the pics.
Shows how efficient it can be to travel in China.
The hotel was also impressive, the suite just a bit oversized, see the pics of the Wanda Realm.

Discover MaAnShan City in Anhui

See the website of the People’s Government of MaAnShan (English):
http://www.mas.gov.cn/english/

Main Listed Companies
Maanshan Iron & Steel Co., Ltd, Anhui Xingma Automobile Co., Ltd, Anhui Shanying Paper Industry Co., Ltd, Sino Anhui Tianyuan Technology Co., Ltd, Maanshan Fangyuan Slewing Ring Co., Ltd, Anhui Taier Heavy Industry Co., Ltd and Maanshan Dingtai Rare Earth & New Material Co., Ltd

Main Outside Enterprises with Investment in Maanshan:
French Saint Gobain, Carrefour, Auchan, Wal-Mart, British BOC, Japanese Marubeni, Taiwan-based China Rubber and Hong Kong-based China Gas, Tsingtao Brewery, Anhui BBCA Bio-chemical, Zhuhai Gree Electric Appliances, Mengniu Diary, Yurun Group, Liby Group, Dali Group and Keda Industrial.

The city has a population of 2.3 million and covers an area of over 4,000 sq. Km. It is built along the Yangtze River, lakes and mountains.
MaAnShan is the most developed city in Anhui Province and it is ranked third in Anhui for economic strength.
It is famous for the Caishi Scenic Area, where great poet Li Bai died.
It is 40 Km from Nanjing downtown area, 300 Km from Shanghai and 270 Km from Hangzhou.
It takes about 40 minutes to drive to Nanjing Lukou International Airport.
MaAnShan Harbor, one of the ten major harbors on the Yangtze River, is the State first-class harbor opening to foreign ships.

Modern Industrial Park of Zhengpu Port New District

We first had a dinner with the Secretary of MaAnShan Municipal Committee of the CPC. The next day we visited the MaAnShan Urban Planning Exhibition Hall. Then we toured the Modern Industrial Park of Zhengpu Port New District, with its new harbor and several industrial zones and facilities. The whole region is newly built, four years ago it was just farmland, hard to realize as so much has been developed. We also visited the industrial zone and the company “MaAnShan Air Handling Green Building Environmental Science and Technology”. It installs large air conditioning units, a cooperation with Israel.

Website of the new zone (Chinese only):
http://www.maszpgxq.gov.cn/index.html

We are currently under discussion to cooperate to promote the new zone and the city.

Trump toilets in China

Posted on by Gilbert Van Kerckhove

Trump toilets are popular

(First of two articles on this issue)
Lots about this in Chinese and international media. What is the connection between Trump toilets in China and IPR? More than one could think.
First, the toilet story.

See:
https://www.yomyomf.com/hey-donald-trump-chinese-company-trump-toilets-are-ready-to-battle-for-your-name/
Hey Donald Trump, Chinese Company “Trump Toilets” Is Ready To Battle For Your Name
By Erin Chew – 17 November 2016
I quote in part:
Ever felt constipated or wanting to relieve yourself after listening to the moronic dribble coming from President Elect Donald Trump and some of his supporters? Well, Chinese company “Trump Toilets” will sell you a luxury toilet equipped with the high tech stuff you see in luxury toilets – you know the seat warmers, sensors etc.

161117-trump_toilets2

They registered the name and trademarked it in 2002, and have stated if Trump tries to take them to the courts they are ready to fight. And if you are online checking out how to purchase a “Trump Toilet”, it will set you back around $880 per unit. They are doing pretty well in China, having captured 85% of the Chinese market share and boasts that over a billion people relieve themselves of “Trump” every year. (not sure about that however!!!)

And also:
In China, Toilets Have Trump’s Name Without His Permission
By SUI-LEE WEE – 15 November 2016
http://www.nytimes.com/2016/11/16/business/china-trump-trademark-toilet.html

The founder of a Chinese brand of high-tech toilets called Trump said he had no intention of soiling the name of America’s next president.
Zhong Jiye, the founder, said he had not heard of Donald J. Trump when he registered the English name of his company, Shenzhen Trump Industrial Company Limited, as a trademark in 2002. In Chinese, the company name means “innovate universally,” he said, highlighting how the toilet seats warm and wash the user’s backside. That Chinese name, he explained, also sounds a little like “trump.”

Trump is very present in China

Since quite some time, Donald Trump has tried to register his name as a trademark but had failed – till now. He did register quite a number of trademarks, see here details:
Of the 46 registered trademarks under the Trump name in China, 29 appear to be owned by Mr. Trump, based on data with the country’s trademark office. At least 14 companies not associated with Mr. Trump applied for the Trump trademark in 2015 and 2016 alone, according to Itaotm, a Chinese commercial trademark website.

trumpchinaipr

23 Nov 2016 – Trump trademarks grow, not all from US president-elect
By Zhang Zhao – China Daily
http://www.chinadaily.com.cn/cndy/2016-11/23/content_27462362.htm

I quote:
US President-elect Donald Trump, as a famous entrepreneur, has filed more than 80 trademarks in China using his name over the past decade, most of which have been granted.
According to a report on Beijing Youth Daily, Trump filed his first five trademarks in 2005. In 2015 alone, when he announced he would take part in the presidential election, he filed more than 40 trademark applications in China.
The applied trademarks cover a wide range of businesses, such as real estate, financial services, insurance and education.
Trump trademarks grow, not all from US president-elect
Besides his name Trump and Donald Trump, as well as their Chinese translations, the trademarks also include Trump Estates, Trump Plaza and Trump International Hotel& Tower.
However, Trump is not the only one in China applying trademarks with the word Trump.
In December 2006, Trump filed an application at the national trademark office for a Trump trademark in the category of house interior decoration and repair services. The application was rejected because a Chinese man named Dong Wei had applied the same trademark in the same category just two weeks earlier.
“However, as Trump has now become the next US president, it is likely that the Chinese trademark office will reject any Trump trademark applications from other people in the future,” it was said.

[TO BE CONTINUED]

What about further devaluation of the RMB?

Posted on by Gilbert Van Kerckhove

Rumors of further devaluation of the RMB Yuan

This week in Beijing I was told of rumors (as I call it) of a further devaluation of the RMB (Renminbi) Yuan, some 17% in a few years. I was asked about my opinion. Some American politicians have been attacking China since long, accusing China of currency manipulation (their currency is “undervalued”). I mostly disagreed with that for many reasons. Well, firstly many U.S. companies got rich by importing enormous amount of products for the consumers. If the RMB would go up, that would be bad for them. Just look at how many billions USD Walmart imports every year from China. The reality is, market forces are dragging the currency down, showing its real market value.
They complain China devalues the currency to favor exports. While this might help a bit, this advantage has since a few years mostly disappeared.

The RMB is losing ground recently

The RMB has become weaker indeed. Reasons? Economists will have many explanations but I stick to the sings that capital has been flowing out, by Chinese companies going on a buying spree, by Chinese people feeling uneasy about the state of the economy and politics and taking their money to “safer heavens”. China is now trying to clamp down on all those illicit capital outflows. Yes, the economy is also under stress and that does not help the currency.
With the pressure on the RMB China has now rather started to defend the RMB

Why a further devaluation of the RMB is not so evident

See here a recent comment in the SCMP, recommended to explore as it details the arguments.
07 November 2016 – Macroscope by David Brown
“Why China’s yuan is poised to be the next global super-currency”
With dominant reserve currencies like the dollar and the euro in decline, the yuan has a great opportunity to be a serious contender
http://www.scmp.com/business/markets/article/2043563/why-chinas-yuan-poised-be-be-next-global-super-currency

I quote:

It has only been a short while since the yuan was granted reserve currency status by the International Monetary Fund late last year, so it is still early days. The yuan’s inclusion in the IMF’s basket of reserve currencies, as recently as last month, means it will take some time before China emerges as one of the leading players in the global payments and reserves system.
To reach true reserve currency status, the yuan must meet three key criteria – cementing credibility, convertibility and confidence in the currency. It will be challenging but not impossible. Governments and multinational institutions must be certain China’s currency not only satisfies these conditions, but it is also backed by credible and transparent policies, in order to feel safe about diversifying their foreign exchange reserves in any significant size into yuan.

And here my comments I posted:

Some good points made. The Yuan has a long way to go but the outlook is rather favorable as other currencies have lost their luster, as explained here. In Beijing some Chinese “economists” predict the yuan will devalue by 17% within a few years. That is better than what some pessimists predict (free fall due to debt and other) but I am more hesitant. China is actually trying to defend the currency as to improve its image as a world currency. Devaluation to help exports is also questionable today. A fact is the yuan is under pressure so the government will have to do something and not let “market forces” act too much. So what will happen? Difficult to say but I would rather opt for under 10% rather than 17%.

What are the main risks in China?

Opinions differ.
Some see the debt burden as a doomsday scenario, the economy will totally collapse.Z
I am not so sure about that, yes debt is a problem but the government has more control than any other country.
More alarming is the real estate bubble. The government is trying to contain it but it is not sure they can succeed. The reason for the bubble are diverse and merits a separate analysis.