How This U.S. Tech Giant Is Backing China’s Tech Ambitions

Aug 04, 2017 · 50 comments
Jack (NY)
I'm sorry. Not a major threat.
Hexuan (Beijing)
Since I am Chinese, any defense I build for my country may immediately be perceived as "biased". Thus I will only leave a question for you to think about:

How did China became such a formidable foe that we now see it as a threat?

It's a Communist country, it is very poor & undeveloped before 2000 (so there was no "big carrot" to start with), A long list of countries around us dispute with us (and we can't build the wall). Our trade routes can easily be blocked. Our country's image on Media is usually bad since 1949. Our products? "low-quality", "copycat", "cheat", "buy Chinese goods and you support communism". This is quite a death-sentence for a country's development. To some extent, the world has done its best effort to make sure China's rise a mission impossible.

I am writing this out not to blame anyone, especially not to blame US. It's politics and I get it. However, one must realize that containment strategy doesn't seem to work that well, at least not on China. Those who thinks America is "too soft" on China failed to give your government full credit, it really tried (and Trump is still trying).
David B (San Francisco)
Perhaps tangential, but I hope the NYT will someday produce a piece that profiles a half-dozen or so of the American execs most directly influential on China's rapid economic (& thus military) expansion over, say, the last 20 years. Perhaps Sam Walton? Perhaps the good 'ol boy that boasted to me years ago about his success in laying the first fiber-optic cable trans-pac to China.

China has been an adversary for generations, and now, only very recently, a formidable military one with regional and global ambitions. Without US execs chasing a half cent profit here, and 3 cents there, China would not have the might to be any sort of thorn in our side/island builder, nor any sort of exploiter/developer on the African continent, or within SE Asia, etc.

As an adversary, they have leveraged our Achilles' heel (our limitless greed, over country, community and all else) to rise. An intelligent, long-view play, in the spirit of Lau Tsu et al.
Jack (NY)
A couple of things to consider. China is a major participant in UN peacekeeping missions. China and the US worked closely together to bail out the global financial system, and cooperate to this day on monetary policy. If you speak to senior US military personnel, they will tell you China is a major threat.
Jack (NY)
Sorry. I meant to say "not" a threat.
Baron95 (Westport, CT)
That is what you get when uncle Bill (Clinton) determined that China was "poor" and "developing" and needed our hep and needed to enter the WTO under favorable terms.

The (very smart) Chinese leadership drove an ocean liner through that opening.

It is too late now. The Chinese markets and economy are now systemically important to America, American companies and American consumers to suddenly stop the music.

Most politicians and economists in the USA still think that this is 1950, when the American economy was the only important economy in the world not to be ravaged by war, and that we needed to help every other country develop at the our expense.

Trump is the only real wake up call.
Nagarajan (Seattle)
If China is stealing IP, then the US must protest and take action. However, with respect to US companies doing business in China, it's a two-way street. China is the largest market for Apple. China is big source of revenue for many US tech giants. Let's not forget that and get into a Trumpian make-believe world where one side is all virtuous and the other side is evil.
oogada (Boogada)
Finally, corporate America poses for an accurate selfie. People so money-grubbing and self interested they will openly trash the country that made them possible, willingly give away secrets they defend to the death in other venues, and ignore the needs of their nation.

They are making 'businessman' a dark epithet, a synonym for guile, evil intent, and a complete lack of concern for their own homes, employees and futures.
Andre (New York)
In all seriousness... What is "secret" about what Qualcomm is doing? Tech transfer is a normal course of business.
oogada (Boogada)
Well, technically, much of tech is not avaialble for export to certain countries.

More importantly, patents are guarded jealously. Except in China which, in spite of many comments below to the contrary seems to feel it needs to take them from us.
Andre (New York)
To "certain countries". Have we learned nothing? Look what happened when we have tried that before(including China with supercomputers). You only make others become more innovative. Bottom line is they are the biggest market now. Does anyone seriously expect they won't use that to bargain more? It wasn't "luck" that got them there.
quantum27407 (North Carolina)
Don't you just love this. On the one hand the DOD is spending vast amounts of money on defense to keep us ahead of Chinese military technology. On the other Qualcomm is supplying the Chinese with the means to gain military technological advantage. Come on gov. make a decision: friend or foe?
Bart (Coopersburg, PA)
What to do? Give up engineering expertise "for free" through espionage, or sell it cheap to foreign government-sponsored companies? Hmm, something better than nothing?
JSB (NY)
Market share, profit, and shareholder value are addictively powerful incentives in the capitalist system. The national security threat, finding your own technology turned back against you... that won't really happen, will it?
Andre (New York)
Strange people think China can't innovate. China has been shut out of several fields and their ability to produce their own has shown them more than competent - supercomputers (fastest in the world) - positioning satellites - and other technologies.
But in any event - the crux o the issue is China is saying they no longer want to be the doormat anymore. They don't want to just make the cheap stuff you buy at Wal Mart. They don't want to just make smartphones but develop them (in some ways Huawei is more innovative than Apple). So it seems people are upset because the Chinese want to upgrade their lifestyle and not be sweatshops anymore. Yet their is so much anger... Yeah I've seen this story play out many times before in history and even in our own society. It usually ends up in strife. I think some people should take a breather. The sky won't fall. China would like to get paid for all the US Treasuries debt it owns. They don't want the US to fail. Seems they are not the only ones capable of propaganda.
Justin (DC)
An article on Qualcomm and their Chinese partners by the NYT was accompanied on my browser by an advertisement for Qualcomm...interesting. Maybe I need to clear my cookies, or maybe NYT should take a look at their sponsors.
Jay (Florida)
Qualcomm should be prosecuted for treason against the United States. Everyone involved in their transactions with China should be placed in prison for life. Qualcomm should be dismantled and distributed among United States based companies.
We're sealing our own fate by failing to restrain companies like Qualcomm that sell off the crown jewels of technology of the U.S. This is not just a business transaction for China. It is a strategic move to overtake the U.S. and make themselves the pre-eminent leader in advanced technology.
Andre (New York)
Funny - because if it was the other way around we would call another country "extremists" and "restricting freedoms". But I recall the same rhetoric against Japan in the 1980's when they were the #2 economy in the world.
Btw - you might want to check where the space program got its start from. It wasn't "homegrown"... Plus - you might want to look at how many foreigners work in US tech companies. Now what would you say if they refused to let their citizens migrate to the US because they felt it was treasonous? Serious question...
Phil Zaleon (Greensboro,NC)
Just as "loyalty" is a one-way street for Trump, acquisition of "intellectual property" and adherence to international norms has been a one-way street for China. Steal what can be stolen, bully when you can, buy cheaply what can be bought, gain advantage whenever possible, but give little access to your internal markets... this is the China mantra. When US corporations compete with Chinese corporations, they are actually competing against a monolithic Chinese government...hardly a fair fight. Is anyone surprised?
Jack (NY)
I have done a lot of research on this matter. Most U.S. companies I speak to believe their IP is well protected. It makes sense to me. That's why we don't see a Chinese built car on the road today in the U.S. They didn't copy a Toyota, Honda, or Chevy.
Aaron (Orange County, CA)
Why doesn't President Trump tweet something about THIS topic ???
Belasco (Reichenbach Falls)
Once again a panicky US wants to change the rules when it comes to China. China is hardly unique in the world in requriring some technnology transfer in exchange for market access. It's common practice. Also they are doing fine developing their own technologies including digital payments, social networks etc.. etc.. Those going on about how China cannot innovate on its own have not been paying attention -- to the facts. Beyond the sectors just listed contrary to comforting stereotypes China leads the world in patent applications, AI research, green research (including electric batteries, cars and solar cells), bio engineering, super computers and just teleporter a subatomic particle into outer space. In addition, they have had to go it alone on their successful space program because the US made sure the not so aptly named International Space Station excluded the Chinese. So please those who keep yammering about "cheap junk from WalMart" you need to update their rhetoric. The real reason the US has its undergarments in such a twist is it is afraid of the Chinese capacity for innovation.
oogada (Boogada)
Capacity for innovation?

Then why do they need to strongmarm reputedly American comapnies to hand over their technology?

Actually, though, my panties are not in a twist, or any other attractive pattern, because I know my President will protect me.
Iver Thompson (Pasadena, Ca)
Money talks, for such, no matter what language it's in. The true universal language.
Mark (California)
This article highlights why its time to renegotiate China's status in the WTO. They are no longer a "developing country" in terms of technological advancement - they're a full fledged developed country. Anyone who has visited there could attest to this.
They should be held to the same standards as other developed countries. The rest of the world has coddled them, bent over backwards many times to accommodate them with no reciprocation whatsoever, so let China compete with the other countries without favoring China's companies.
They are caught in the middle income trap - not quite a developed country but no longer developing country either.
Given that China is so used to copying/stealing/forceably coercing foreign companies, they probably won't fare as well. Which is why they don't want to lose their status as a developing country in WTO terms - they're afraid of the consequences, and rightly so.
Andre (New York)
Your comment doesn't make much sense. They are either developing or developed. They either have all technology or not. Their per capita GDP says they are not fully developed yet. You can't change the rules of te WTO because China plays it well.
Muezzin (Arizona)
What Qualcomm is doing is very close to treason. Is the profit for a few American companies really worth the inevitable military escalation in which the Chinese will be using Qualcomm's know-how?
Notmypesident (los altos, ca)
Remember what Karl Max said: the capitalist will even sell you the rope with which to hang them.
UC Graduate (Los Angeles)
Americans are deluded to think that there would be no technological transfers between the U.S. and China. For the past three decades, we have used China as our factories and then now as the largest consumer market. Does anyone in their right mind think that the Chinese government, Chinese companies, and Chinese people would be satisfied with just providing cheap and disposable labor? Did you expect Germany, or Japan, or South Korea to be stuck in the bottom rungs of the commodity chain as they were in the 1950s, 1960s, and the 1970s, respectively? It's utterly inane to think that China would NOT follow the well-warn strategy of post-World War II industrial development path that all other countries with smart developmental states have followed. Why aren't American policy makers raising their pitchforks to lament the success of BMW, Sony, and Samsung? The big canard in all this is that China is Communist country with the CCP at the top. Yet, it should be obvious to any fair-minded person that CCP has done right for the Chinese people. Given how things have unfolded in the global economy, China is much better off than places than Russia, Mexico, and India: more importantly, think about who which of these massive countries improved the lives of ordinary people. If you've visited these places over time, it isn't even close. Many people believed (and still believe) that China must become rich before it becomes a democracy for the sake of social stability. My mind hasn't changed.
NorthernVirginia (Falls Church, VA)
China is a den of intellectual property thieves. The structure of their government most closely resembles that of a Mafia crime family. Remember election night excitement when Xi Jinping won the position of General Secretary? No, because there was no election.

China is bent on global conquest. Our export controls are designed to stop such menaces from acquiring advanced technology. Time to cut China off from their carefree, looting ways.
Andre (New York)
NothernVirginia - actually you sound like a propagandist. Just like with Qualcomm - most tech transfers were of free will. If you want access to that huge market - they expect you to help them develop. Or did you expect them to stay servants forever?
"Global conquest"?? Awe man - that sounds like the military industrial complex ticking in your head. Check who spends what on their military per capita based on GDP. China's history is not like Rome. Go look up what the Silk Road was and why they are talking about it again in China.
JTFJ2 (Virginia)
An astoundingly bad idea in so many levels. Never in human history has one country (China) so completely and flagrantly stolen its way to economic success. It has robbed us blind and we're partly responsible for it. We need to significantly curtail Chinese enrollment in US university graduate programs, ban any/all purchases of US tech firms, and review any/all requests for intellectual property transfer. And curtail our manufacturing there, beginning with Apple. They do mean to control the world, but not through accepted international norms.
JimW (Hawaii)
Apple is not the only computer maker to use Chinese factories for assembly. As mentioned in the article both HP and Dell rely on Chinese manufacturers, as do many others. Apple just happens to be the most successful in the global market of ANY company because they produce the best designs with an elegant integrated operating system.
Andre (New York)
JimW - Samsung leads in smartphone and has actually become more profitable overall than Apple. Samsung is from South Korea.
Loyd Eskildson (Phoenix, AZ.)
Once again, proof that 350 million Americans going every direction at once can't beat 1.2 billion Chinese all going in the same direction.
Fearless Fuzzy (Templeton)
"Those efforts form the backbone of President Xi Jinping’s ambitious plan to ensure that China’s companies, military and government dominate core areas of technology like artificial intelligence and semiconductors."

The key word here is "dominate". I'm old enough (69) to remember the state China was in during the "Red Guard" era. Their rise to today is astounding. They took thousands of US factories and factory jobs so we could buy cheap stuff at Walmart. What happens when iPhones, and all other state-of-the-art high tech, is equaled by Huawei et.al. and costs 10-30% less? The new iPhone 8 is speculated to cost $1000....too much for the average Joe. In the first quarter of 2016, Huawei sold 10 times more phones in Finland than Apple. China is producing vastly more PhD's than we are and they will use American money and brainpower until they equal it and underprice it. The President has taken us out of TPP and the Paris climate accord, limiting our influence. Are we letting Dracula manage our blood drive?
West of NYC (Surprise AZ)
China took no jobs, American companies GAVE them the jobs when they opened factories in China and closed them in the USA. The same is true for Europe, Canada and Japan. But then again that's what capitalism does - it moves production to the cheapest places. Of course some American companies could have invested in factories to make them more efficient and lower the costs of production and some did but most just left the USA and went to China where there were few labor protections, environmental protections and plenty of cheap labor. But as the Chinese have discovered being the 'world's factory' has its downsides just as we discovered in the 1960s and 70s and the EPA was created out of need to protect Americans from greedy selfish companies who could care less about what they did to the environment.
HapinOregon (Southwest Corner of Oregon)
Back in the day Nikita Nikita Khrushchev famously said that the US would sell the USSR the rope the Soviets would use to hang America...

Capitalism Über Alles, or

Plus ça change, plus c’est la même chose...
Woof (NY)
"We will hang the capitalists with the rope that they sell us."

Vladimir Ilyich Lenin

The PRC, a communist regime, knows her Lenin.
David (Nevada Desert)
Mr. Cooper lives in Trump Land. Phrases such as "China lacks the innovative ability," "plunder the USA," "stolen intellectual property," "ongoing piracy" and etc. bespeaks of a loser from the rust belt/coal country. If our nation is to meet China head on, it must be more than just the leader in finance and weapons development.

Thank God for someone like Elon Musk of Tesla showing up Northern Nevada (and Fremont, California).
crosem (Canada)
Musk interview with Wired, 2012: '[Spacex's] primary long-term competition is in China—if we published patents, it would be farcical, because the Chinese would just use them as a recipe book.'
West of NYC (Surprise AZ)
What has being from the rust belt got to do with the truth? China steals almost everything it doesn't have the ability to conceive on its own. If you don't think that's true then you don't or haven't read enough. An article more than a decade ago in the NYT related how 90% of Chinese government computers used pilfered/stolen copies of Windows and with a single push of a button MS could have made them all inoperable but didn't unlike they do to the citizens and residents of the USA. Unknowingly I bought a counterfeit MS program at a computer show that was made in China and MS zapped me. China steals everything, their corporate espionage is second to none and as a result some US companies were almost or were put out of business as a result of espionage and IP theft.
R S B (Livingston Nj)
Some communist leader once said or may be this was a general saying in the communist countries "Capitalists will sell us the rope with which we will hang them", these may not be exact words but almost exact.

China has taken piggy back ride on western technology and capital and gone this far. Do not help them go too far. Look at their strong arm tactics against small countries in the region.
AGC (Lima)
Altruism ? Of corse not, it is only more money.
Padraig Murchadha (Lionville, Pennsylvania)
“The capitalists will sell us the rope with which we will hang them.”—Vladimir Ilyich Lenin
John Smith (NY)
All the US has to do is slap extreme tariffs on US companies' products for those companies aiding China through knowledge transfers. Consider FORD. They are building state of the art manufacturing facilities utilizing state of the art robots in China while producing recall plagued vehicles put together by overpaid UAW workers in the US.
During WW II the US was victorious due to our manufacturing edge. If we ever had to fight China would we still be able to get all the components needed for today's weapon systems?
George Cooper (North California)
China lacks the innovative ability of the United States, so their plan all along has been to plunder the USA and seize the profit opportunities of America's innovation for themselves.
To this end, not just the absurd special provisions applied to China's joining the WTO that give them a major advantage (negotiated by the godfather of outsourcing, Bill Clinton), but the hundreds of thousands of "students" and H1B visa workers that China has implanted throughout the top universities and tech companies of the USA serve to provide a steady flow of stolen intellectual property to the People's Republic.
It's time for the USA to wise up about the ongoing piracy.
impegleg (NJ)
Why are these companies sowing the seeds of their own demise? Short term profits? Expectations that the US government will protect them from the competition? Do we not have security concerns about all this technology being exported?
Sam H (London)
The companies are driven by the need to meet quarterly revenue and profit targets - expectations of continued rapid growth underpin the buoyant share price of tech firms, and if they're not met, then the share options of the CEO and Board become worthless. If they are met, the execs (who are often only in place for a few years, or less) make $$$$$$.

The Chinese government rules over one-fifth of humanity and an ever-growing share of world GDP. It's hard to meet profit targets if you shut yourself out of the world's No. 2 economy (like to soon be No. 2). The Chinese officials are looking 10, 15 years ahead (when many will still be in place). Most execs are not.
Usok (Houston)
Joint venture dose not mean selling out company secrets or dominant technology. It is quite different from simply selling company technology to another company (or country). Joint venture does mean to cultivate and promote local technical expertise and gain trust to move in to local market with the least competition in the future. It is a win-win situation. Using joint venture approach by not losing its own technical superiority and also gain market share in the future, why not.