2011 report to congress - U.S.-China Economic and Security Review ...

81China in Search of Western Technology: A Case Study—ContinuedThe Chinese government has refused to extend to General Motors(GM) a $19,300 per car subsidy that is available to Chinesecompetitors unless GM provides its core technology to a Chinesecar company. Thus far, GM has refused, even though the Chinesesubsidy is nearly half the sales price of the Volt in theUnited States, $41,000. 275 The car has not yet been priced in theChinese market. Lacking the subsidy, GM would likely find itdifficult to sell the Volt against its Chinese competitor, BYD,which manufactures two versions of a plug-in electric car. ComplicatingGM’s dilemma is the fact that the Chinese market forauto sales is now the world’s largest and the fastest growing,and GM is the largest foreign manufacturer in China. Said GMChief Executive Officer Dan Akerson: ‘‘There are technologyrisks, there are relationship risks. I am sure China will dowhat’s best for China. . . . But you ignore China at your ownperil.’’ 276Meanwhile, GM has an eye on its major Detroit rival, the FordMotor Company, which has announced plans to build four newplants in China and roll out 15 new vehicles there by the end of2015. That move would double its capacity in China. Ford hasnot yet decided how much of its technology it would be willing toshare in order to qualify for the subsidies. 277 The Chinese governmentis thus encouraging Ford and GM to compete on thebasis of which company will surrender the most technology toChinese rivals.dkrause on DSKHT7XVN1PROD with $$_JOBIntellectual Property Infringement in China: The BusinessSoftware CaseAll members of the World Trade Organization, including China,are required to provide minimum levels of protection to the intellectualproperty of fellow WTO members. An agreement within theWTO specifically ensures that copyright protections extend to computerprograms, which are protected as literary works under theamended Berne Convention of 1886. 278 The People’s Republic ofChina agreed to enforce these widely recognized rules and regulationswhen it joined the WTO in 2001.By nearly all accounts, however, the People’s Republic of Chinais one of the largest sources in the world of counterfeit and piratedgoods. China in 2011 remains first on the ‘‘priority watch list,’’ adesignation shared with 11 other countries, which are among theworld’s worst enforcers of intellectual property rights, according tothe Office of the U.S. Trade Representative. 279 The Chinese governmentitself estimates that ‘‘counterfeits constitute between 15 percentand 20 percent of all products made in China and are equivalentto about 8 percent of China’s GDP [gross domestic product].’’280China is by far the dominant source of counterfeit and piratedgoods that U.S. customs agents seize at ports and airports aroundthe United States. According to U.S. Customs and Border Protection,Chinese-sourced goods accounted for 53 percent of the sei-VerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00093 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2011\067464.XXX 067464