It is not only fake products, retail establishments, fake Apple Stores and hotels that threaten China’s future, but also an educational and business culture that still discourages creativity and innovation. The result is that many Chinese companies, products and services are simply mirror images of ideas developed in the West.
To be sure, there has been some movement in recent years toward increased respect for and enforcement of IP and and innovation in technology, product development in China. For example Weibo, though modeled on Twitter, has innovated and helped take micro-blogging to a new level. WeChat is a truly original and innovative social media/chat platform with millions of usersoutside China. Shanghai Tang continues to show that Chinese fashion and retail can be original and successful while Lenovo has shown that a Chinese company can create new technologies, cutting-edge products and wickedly smart and effective marketing strategies. But, for now, these are the exceptions to the rule.
Despite endless talk in the media and boardrooms around the world, and Beijing acknowledging the dangers to China from intellectual property theft, the reality is this: Shan Zhai culture, IP theft, “borrowed ideas,” and fake products are still as big a problem as ever in China, and copycat culture still presents a major threat to China’s continued development.
Copycat China threatens both foreign companies and China itself, in the following ways:
It reduces foreign investment into China.
It causes some foreign companies already in China to leave due to IP theft. Equally important, it causes foreign companies not to bring in their most IP-sensitive products.
It makes foreign firms reluctant to use China-based service companies and technologies, especially in IT outsourcing, for fear of losing IP to such companies.
China’s lack of an innovation culture and reliance on borrowed ideas means China is not creating products the rest of the world wants and needs.
All of the above reduce China’s competitiveness and help prevent it from moving from being the factory to the world to being a real innovator, hurting overall growth.
Read more at Forbes.