Economy

In China anything can be copied

Posted on by Gilbert Van Kerckhove

IPR anybody?

As reported earlier, IPR is a major problem as In China anything can be copied.
Some copies can be hilarious but some other copies are rather bad for your health.

Some examples

Fake rice, yes that exists as well as fake eggs. There was a hoopla in Nigeria about imports (from China, what else?) said to be fake rice. Then the authorities got fuzzy and confused about it. Maybe they ate the rice?
Geely tried to copy Rolls Royce. Nice try.
Pollution masks had a really familiar logo. Maybe with a smell of beer? Healthy Heineken!
Cosmetics can be pretty tricky, there are so many fakes on the market. Mostly they show their true face by the spelling mistakes. Lancôme suddenly becomes Lancômes. Problem is, 99% of the Chinese hardly can read any English and are easily fooled. Pretty dangerous to use those products as one has no idea what’s inside.

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.

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.

Successful lobbying in China

Posted on by Gilbert Van Kerckhove

Back to Yenching

On 24 October I had an evening lecture at The Yenching Academy, Peking University (“Beida”). The theme was lobbying in China. Duration: well over two hours including the Q&A.
This was the second one, see earlier post with the details of the Academy:
“Biking and Chinese cultural conflict”
https://blog.strategy4china.com/2016/09/biking-and-chinese-cultural-conflict/
In the first lecture all students were Chinese; this time all were basically foreigners

Can lobbying in China be successful?

Well, the first questions should be: is it legal? What do we understand with lobbying?
After clarifying that and giving a quick overview on the tremendous changes China saw over the past 35 years, I moved to the core of the lecture. I give two real lobbying examples: the “Athletes Alley”, the huge sculpture of the artist Olivier Strebelle; the re-launching of metro projects in China through the contract for Shanghai Metro Line 3.
Both are two projects I handled personally. Both are of the type what I call “Mission Impossible”.
A lively debate followed where I explained also how one can overcome a new cultural obstacle, how to face challenging environments and the need to think out of the box.
Another issue I discussed is the other side of the medal: the difficulties working with the head office in Europe and the often murky situations one faces there.