Forbes Magazine (which, BTW, does a consistently excellent job in covering China) has a new and interesting article out, entitled, “U.S. Talks Up WTO Piracy Ruling, But It’s All Wind” and subtitled, “Washington claims that the trade body took its side in a suit against China, yet the decision will not halt intellectual property theft.”

Piracy is a crime in China too. Sort of. (by Stephen Dann,
Piracy is a crime in China too. Sort of. (by Stephen Dann,

The article talks about how the United States government has been playing up its victory on two of its three claims, but since it lost the one really important one, its victory claim is little more than spin control. To grossly oversimplify, the WTO ruled that China’s criminal IP laws are not inconsistent with China’s WTO obligations.

China Law Blog’s own Steve Dickinson is extensively quoted downplaying the U.S. “victory”:

The U.S. claim was trivial and hyper technical. They won on the hyper technical issue. The only serious issue was the criminal sanctions issue, and they lost on that one. So what this means is exactly nothing,” said Steve Dickinson, a Qingdao, China-based lawyer and partner at Harris Bricken.

Moreover, piracy involving China’s own copyrighted films, music and other works is just as rampant as that for foreign-licensed goods. “If China cannot solve the problem for their own domestic industries, how can they solve it for the foreigners?” Dickinson asked. Indeed, Chinese copyright owners are as unhappy as American ones: the Music Copyright Society of China and domestic record companies last year sued popular Web portal Baidu for offering unlicensed music content.

This goes back to something we have been saying on this blog since its inception: China is getting tougher on IP violations and it will continue to do so in tandem with growing IP requirements of its own companies. IP in China is going to be much more closely tied to its own self interest, as opposed to the dictates of outsiders. Chinese companies are increasing their demands for IP protection within China, and as that continues we can expect to see IP protections in China continue to improve. But very, very slowly.

Interesting Forbes Magazine article on avoiding HR mistakes in China. The article is entitled, How Multinationals Err In China and it focuses on the following three common human resource (HR) mistakes foreign companies make in China.

  • First mistake: Glass ceiling. Two-tier pay systems undermine the morale of Chinese workers who want to climb the corporate ladder and cause top mainland talent to prefer to work for domestic Chinese companies, where they do not feel discriminated against. Chinese workers leaving multinationals often indicated the main reason they had left was their feeling they lacked a clearly visible career path with their company. “The majority said they would have stayed if they felt that the company appeared to be ‘interested in developing their careers.'” Multinationals doing business in China should implement uniform pay packages, increase the number of high level Chinese executives who get promoted through the ranks and develop clear career paths that Chinese employees know they can follow.
  • Second Mistake:  Ignoring Need for Work-Life Balance. China’s baby boomers have experienced 30 years of uninterrupted economic growth and they are “incredibly optimistic” about their career paths. In interviews with Chinese between the ages of 21 and 28 in Shanghai, Beijing and Guangzhou, the overwhelming majority responded that a “balanced life” was the most important consideration in job satisfaction, ahead of a good salary and job security.  Companies need to understand that paying high salaries is no longer enough to keep executives from jumping ship.
  • Third Mistake -Ignoring education and training. Chinese employees need and want continuing education and training options.  An online survey revealed that 90% of Chinese between the ages of 18 and 28 stated they wanted access to continuing education and 41% said considered continuing education the best way to raise salary packages and realize their professional and financial goals. Foreign firms must develop training courses that give employees the business skills they need:

Some of the most successful multinational companies in China, like L’Oreal and Starwood, have implemented rotational training programs that give Chinese employees the chance to spend time working in other countries. Overseas training is one of the most prized benefits Chinese employees mention in our surveys. Offering top workers the option to spend six months in France or the U.S. is a smart way to build company loyalty and develop the business savvy currently lacking in many Chinese executives.

The article sums it all up:

Foreign companies that remove glass ceilings, tailor their pay packages to incorporate the emphasis employees place on balanced lives and implement continuing education programs will retain China’s best employees and generate increasingly significant revenues on their bottom lines.

We agree, but what do you think?