CNN: Did China steal Japan's high-speed train?

[greengiraffe]

Probably answered the question why Sembmarine cashed out of Cosco instead of helping their Chinese low costs partners. I have stated my concerns in YZJ and the following article explains it all

http://tech.fortune.cnn.com/2013/04/15/c..._Highlight

Did China steal Japan's high-speed train?
April 15, 2013: 5:00 AM ET


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The company that makes Japan's legendary Shinkansen bullet trains certainly regrets working in China.
By Michael Fitzpatrick

FORTUNE -- One China defender recently claimed his countryman's "bandit innovators" could be good for the world. That was small consolation for the Japanese, who say that China pirated their world-famous bullet train technology.
"Don't worry too much about Chinese companies imitating you, they are creating value for you down the road," said Li Daokui, a leading Chinese economist at the Institute for New Economic Thinking's conference. Such "bandit innovators," he expanded, would eventually grow the market, leading to benefits for everybody.
Kawasaki Heavy Industries (KHI), maker of Japan's legendary Shinkansen bullet trains, bitterly disagrees. After signing technology transfers with CSR Sifang, the builder of China's impressive, new high-speed rail, KHI says it deeply regrets its now-dissolved partnership. It planned to sue its previously junior partner for patent infringement, but it backed down recently.
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Risk analyst Michal Meidan of Eurasia Group believes KHI is wise to drop the IP suit and stay out of China. "Every firm working in the high-tech space in China should be aware of the risks related to weak IP protection in the country but often has few choices but to go into these agreements if it wants to gain market share there," she says. "The intense competition prompts companies to make concessions on technology transfers, as the Chinese are very good at playing off the competition."
What could drive the normally unlitigious Japanese into such a frenzy? Not only did China copy their technology, say the Japanese, after patenting remarkably similar high-speed-rail (HSR) tech, CSR now wants to sell it to the rest of the world -- as Chinese made. Both Japanese and European rail firms now find themselves frozen out and competing with their former Chinese collaborators for new contracts, inside and outside China.
With a diminishing domestic market, Japan's train industry is hoping to pick up orders abroad for its HSR. Before China stepped in, undercutting Japanese offers by about half, Japan looked very attractive to foreign buyers with its record for fast, reliable train systems.
With more than 300 million annual riders, Japan's Shinkansen -- 50 years old next year -- trains carry more passengers than those of any other HSR system. It has suffered no fatal accidents. The U.K. was impressed enough to complete a 540 billion yen deal with Hitachi, which also builds Shinkansen, to supply bullet trains by 2016.
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The Motherland of train travel is not alone. Everyone is shopping around for high-speed solutions including the U.S., as the $180 billion global rail industry continues to boom.
Outside of Britain, Japan could easily find itself edged out by the Chinese competition. This makes KHI's Harada Takuma, who worked on the Chinese collaboration, very angry. Under the licensing agreements with KHI, China's use of the expertise and blueprints to develop high-speed railway cars was to be limited to domestic application, he explains. "We didn't think it was not risky. But we took on the project because terms and conditions under the tech transfer should have been binding. We had a legal agreement; we felt safe."
The Chinese authorities, for their part, see no problem. As Beijing busies itself filing for HSR patents abroad, it claims China developed her own HSR based on Japanese and German technologies which it claims were merely "digested." When it was suggested that China trains were mere knockoffs at a press conference in China recently, the Ministry of Railways spokesman asserted that China's HSR was far superior to Japan's Shinkansen, and that the two "cannot be mentioned in the same breath."
Others, such as a few Chinese engineers, have admitted no real innovation. That they were "just standing on the shoulders of giants" as one rail technician put it. Wherever the truth lies exactly, KHI's train technology transfer saga is unlikely to be over soon.

[pianist]

talking about stealing..who can be more dirty than transporting all the natural resources, gold , precious metals from china back to japan during the many decades of japanese occupation?

japan got to this state partly because they colonized and steal all the precious resources from other countries. the same goes for the european colony

[specuvestor]

In a sense same thing that occurred in Japan during the 70s, Korea and Taiwan in the 80s

IMHO I would say China TOOK rather than STOLE. It was evident why Chinese did all these JV from cars to rails to semicons. They want the technology. That's why all these years US was not in the forefront of China investment. The rest went in with open eyes

And China is able to dictate the JVs simply because people wanted the market. They effectively exchanged tech for market. Nobody would do that for Singapore or even Malaysia markets

[CityFarmer]

In a sense same thing that occurred in Japan during the 70s, Korea and Taiwan in the 80s

IMHO I would say China TOOK rather than STOLE. It was evident why Chinese did all these JV from cars to rails to semicons. They want the technology. That's why all these years US was not in the forefront of China investment. The rest went in with open eyes

And China is able to dictate the JVs simply because people wanted the market. They effectively exchanged tech for market. Nobody would do that for Singapore or even Malaysia markets

IMHO, i would say China EXCHANGE rather than TOOK. It is a fair deal for exchange market with technology. China is clear in its intention to learn the technology before the deal.

[yeokiwi]

In a sense same thing that occurred in Japan during the 70s, Korea and Taiwan in the 80s

IMHO I would say China TOOK rather than STOLE. It was evident why Chinese did all these JV from cars to rails to semicons. They want the technology. That's why all these years US was not in the forefront of China investment. The rest went in with open eyes

And China is able to dictate the JVs simply because people wanted the market. They effectively exchanged tech for market. Nobody would do that for Singapore or even Malaysia markets

IMHO, i would say China EXCHANGE rather than TOOK. It is a fair deal for exchange market with technology. China is clear in its intention to learn the technology before the deal.

Whether it is STOLE, TOOK or EXCHANGE, the problem is that china firms will not honor signed agreement.
In current case, KHI is bitter because its junior partner has ventured out of china despite the legal agreement.

In the long run, China has more to lose than a bitter KHI.
If the more innovative Americans, Europeans and Japanese are not going to collaborate with China companies and universities, how far can china go?

There is a reason why all leading edge technologies development are flourishing in US.
What high tech hardware or software have china produced so far for the world?

[d.o.g.]

Whether it is STOLE, TOOK or EXCHANGE, the problem is that china firms will not honor signed agreement.
In current case, KHI is bitter because its junior partner has ventured out of china despite the legal agreement.

Might makes right.
History is written by the victors.

Pithy sayings rooted in bitter experience. History is full of people who stole technology or information or switched sides and thus changed the course of nations. Whether they are viewed as heroes or villains depends on whose side you take.

It is no secret that high-tech manufacturing firms do not produce their key components in China. The car companies import their ECUs, camera companies import their sensors, handphone companies import their CPUs and displays. Anyone who made such things in China quickly found that the Chinese competitors would somehow learn to produce these in no time at all, eliminating the technology gap that provided the pricing power and accompanying profits.

Kawasaki was not the first to learn this, and it will not be the last. Even the Russians have been annoyed that the Chinese are copying their weapons systems and selling them internationally, undercutting Russia's own arms sales.

[mrEngineer]

This is true for yellow machines (e.g. Caterpillar) as well. The Chinese is really smart to let companies enter and dangle plenty of carrots in front of these foreign MNCs so that they will continue their JVs but ultimately end up not Central government will have the final say to deny MNCs to expand their market share in China.

It is to my understanding that generally for partnerships or M&A, there is usually a 5 year non-competitive claus as a a standard. Therefore, Kawasaki will lose this battle in matter of time anyway.

[mulyc]

This is what's happening to our rigbuilders as well isn't it? chinese shipyards are copying Singaporean and Korean rig designs and technology.

Its either plotting to be a step ahead of them, or lose out. that's how you compete with the chinese, by being on your toes 24/7. they work hard, you better bloody work harder.

[investor101]

Of course China copies! They also copied ICQ, Twitter, Google and YouTube.

Look at China's tv shows. They don't come up with new plots, but continually make historical drama shows. You expect China to come up with original ideas such as 'X-Men', 'Seinfeld' or 'Lord of the Rings'?

Ask yourself if it is more likely for China or HK to produce a hit series, or simply make yet another remake of 'Return of the Condor Heroes' or 'Journey to the West'.

[ValueBeliever]

What copy? Copy it, improve on cheapness with price appeal and almost = in function. You the consumer n investors are to blame at the end of the day for chosing chinese product.

You guess who is hacking all the way. The Communist party. In the name of country they employ vast human top talent to legally hack into system, steal all the data and knowledge and then spread it to their SOEs to copy. But lots of it will also end up in the hands of private enterprise.