http://www.forbes.com/sites/kenrapoza/2012/07/22/in-china-why-piracy-is-here-to-stay/?ss=innovation-science

In China, Why Piracy Is Here To Stay


Kenneth Rapoza, Contributor
7/22/2012

Cheap knock-offs is sort of a thing in China. They call it the shanzhai imitation and piracy of name brands, be it Gears of War for PlayStation or the latest Adobe Photoshop.

In China, said Tom Doctoroff, author of the book What Chinese Want and a China marketing guru at J. Walter Thompson, managing a fake Apple store, or any kind of fake this or that, is heralded as good ole fashion entrepreneurship.

When it comes to innovation, the Chinese wont deliver, he told me in a phone interview back in mid-May. China is the total flip-side of the U.S. Piracy goes back to the China world view that individual rights dont matter. The courts have never evolved to protect innovative individuals. There is still very much the ethos that economic growth has to be managed, so individual and intellectual property, where the spoils go to one entity or one person, is not a cultural value, he said.

IP protection will always be an uphill struggle in China and for companies doing business there. And thats mainly because of the fact that individual rights remain a theoretical notion at best. Chinese civilization exists courtesy of a top down structure. Even the education system mitigates against broad-based embrace of IP protection. Until IP infringement is seen as an immediate threat to economic success, or advanced as a vital state interest, few will really care whether Windows 8 is a knock-off, or if the X Box 360 sold in Shanghai is being hacked to allow for a pirated version of 2K Sports NBA Basketball.

Microsoft ran its anti-piracy ad in China when it launched Windows 7 to counter the bad habit. In the ad, two young Chinese techies are seated at a desk. The guy who paid full price is being heralded by his thumbs-up boss as a good worker. His bamboo plant is growing tall and green in a pot on his desk. His trash can is clean, save for maybe one piece of paper. Behind him is the guy using the pirated version of the software. And man does he look down. A big X on his screen, head in his hands. Boss pointing a finger at him, trash can full of paper, power cords tangled up all over the place, and wilted flowers on his desk to add to his miserable work life.

Yet, many Chinese think illegal software is the smart choice because its cheaper. Computer sales people have incentive to reinforce this perception because they can increase sales margins by replacing genuine with copies instead.

Wei Quing, head of Microsofts Windows business group in China, told Doctoroff in his book that the company was trying to create a new religion, a new standard of civility in China. It will take a long time.

Research suggests that preliminary efforts have helped increase preference for the genuine, but not enough to make a serious dent in the pirated versions of the same goods. The government of China knows that current copyright infringements cannot be legally justified under the World Trade Organization, but it is unable or maybe even unwilling to confront the problem.

Thats software. It gets even more flagrant with filmed entertainment. Pirated Hollywood (and Chinese) films are sold on the cheap on street corners across the country, not to mention inside smaller, private shopping centers.

Government censorship polices further complicate matters because they increase the demand for contraband content. Even if the Communist Party liberalizes distribution restrictions, per WTO regulations, censors will sanction only a narrow range of content in legal channels, both online and in actual stores. This begs the question of Chinese censorship and what is and is not allowed, Doctoroff said. In his book, he writes:

As in dynastic times, anything inconsistent with the governments role of promoting a harmonious society will be prohibited. Notably, groups must never seek to become alternative centers of authority and challenge the party, and explicit or extramarital sexuality is always banned. The latter is driven by both the sensitivities of a generally conservative population and the governments patriarchal responsibility to protect the moral standing of the masses.

Chinas official view on piracy is more dont ask, dont tell than anything else. Illegal video games are pervasive in internet bars. Illegal DVDs are simply sold right out in the open. The Chinese internet is loaded with porn of all stripes; so much for concern over the moral standing of the masses.

While this may seem profoundly hypocritical, the Chinese consider it pragmatic. Understatement knowing when to turn a blind eye to transgression is both a skill and contributor to social order. The government realizes that the people in China are torn between Confucian regimentation and upwardly mobile ambition, and therefore are emotionally repressed and crave release, Doctoroff said. So long as the channels through which this is delivered remain narrow and pose no threat to centralized authority, they will be accommodated.

To steal a book is an elegant offense, Doctoroff told me. Its recovering wisdom. Especially if you were not supposed to read the book in the first place. In China, people do get the link between IP and innovation, for example, but it doesnt go very deep. Companies like Universal and Warner Brothers will just have to lower their margins to next to nothing to compete. A sale is a sale; some money is better than no money at all. This is a society where, if you open a fake Apple store, people start writing articles about how innovative and creative you are, he said.



===========================================


Krinvanto Vishwam Aryam
(Make this World Noble)

- Rigveda


-------------------------------------------

Awaiting Oneman's fury here.

---