Two excellent quotes from Bill Russo in one article. Bill formerly headed up Chrysler Asia and he is now based in Beijing with Booz & Co. He knows China’s auto industry as well as anyone.
Both of these quotes come from a Detroit News article, entitled “Ford-Geely deal spells out tech sharing” [link no longer exists]. The article highlights Detroit’s skepticism about China Auto’s willingness to abide by tech sharing agreements.
Russo’s first quote is on intellectual property protection in China and it nails it by pointing out how the laws are fine, it’s enforcement that is the issue:

“There’s a well-articulated set of intellectual property guidelines and laws, but there hasn’t been consistent enforcement of those laws,” said Bill Russo, a Beijing-based consultant with Booz & Co.

We often counsel our clients who license their technology to Chinese companies that they should front-load as much of the license payments as possible and that they should only enter into the licensing arrangement if it makes sense even if they are only paid for the first year or two under a longer term deal. We tell them this because our experience has been that Chinese companies do fairly often (though less than in the past) stop paying licensing fees after they no longer need further assistance from the foreign company licensing the technology.
But my favorite quote from Russo is on how China’s auto manufacturers are not “there yet” when it comes to making a world class car and is explanation for this shortcoming:

Auto analysts say the Volvo acquisition will help Geely gain expertise in vehicle development — an area where China’s fledgling carmakers are all weak. Geely has only been making cars since 1998, while expertise in vehicle development is built over five-year product cycles.
“It’s like you can go to medical school and be a straight-A student, but until you’ve been a doctor for 10 years, you’re not going to be that good at it,” Russo said.

But give China time:

But it won’t take long for the Chinese to catch up.
“We probably had this discussion about Japan 40 or 50 years ago, and we probably had this discussion about Korea 10 to 20 years ago,” Booth said.
“The world is accelerating, and China is accelerating very fast.”

Do you agree?

Print:
EmailTweetLikeLinkedIn
Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.