Intellectual Property and Chinese Cars

GE Geely Rolls Royce Knockoff
GE Geely Rolls Royce Knockoff
GE Geely Rolls Royce Knockoff
GE Geely Rolls Royce Knockoff | Ge Geely, Knockoffs,

China's Growing Industry Of Automotive Knock-Offs

Chinatown in Honolulu is a money trap for tourists, but we feed it anyway like so many other things. Other than the smell of unmentionable, unlucky animals and seafood you probably never knew were edible, the one thing you know you'll find are oversaturated, cheap, plastic merchandise and souvenirs no storefront vendor will ever run out of. Dig a little deeper (what am I kidding, you probably won't have to dig that deep in Chinatown) and you'll find a treasure trove of things for a price that will astonish you and make you wonder "what's the catch?"

"That's not a real Rolex" my father said to me as we walked out of a random store in Chinatown, 2004, on a sunny Honolulu day. "A real Rolex isn't worth $30 and I noticed the paint on the watch face was peeling off." That was my first encounter with the world of counterfeit wonders, from watches to purses, fine jewelry and other things you never knew could be ripped off. It's horrifying in a way, - the lengths which people will go to sell you something that is so painfully fake, but we say yes anyway, and our wallets agree with us. It's an unspoken truth. If it looks the same, no one will care since the goal isn't authenticity in our race against the Joneses, it is image. A wise man once told me "what is the difference between a fake watch and a real watch? The price you pay."

No one cares if someone is swinging fake Tag Heuers, but rip off a Porsche in every way but name only and you have an enemy for life. If you see any major scams coming from China in 2019, expect the army of knockoff cars to be front and center.

Have you ever heard of Zotye? Odds are unless you are an automotive aficionado you probably don't, but this is one giant Chinese auto brand you might be seeing in a town near you. In 2015, Zotye released the Zotye Auto T700, which is a replica of the Porsche Macan. In order to satisfy a growing middle class, Zotye released their Porsche knockoff for a higher sticker price for Chinese consumers (with worse engine quality) and half the price for consumers in countries that aren't outright banning Chinese vehicles. China has been stealing billions of intellectual property for years, but their knockoff vehicles are a blatant sign that they simply don't care about the opinions of the rest of the world.

In fact, their lack of concern is so evident, President Xi Jinping rides around in a vehicle called the GE by Geely Automotive. If you go ahead and search for images of the GE, you might think you are staring at a Rolls-Royce Phantom, but you are in fact looking at a genuine knockoff. Brands like Zotye may pride themselves on trying to live by a "principle of humble integrity" but if your vehicle looks like a Rolls-Royce, honks like a Rolls-Royce, but isn't a Rolls-Royce, then you definitely are driving in a knockoff Rolls thanks to stolen intellectual property.

In an article at the website highsnobiety.com where they discussed the booming Chinese (knockoff) automotive and electronics market, the author stated "according to research by Gartner, 150 million Shanzhai mobile phones were sold in 2007, more than one-tenth of the global sales. By 2010, it is reported that Shanzhai phones had jumped to 20 percent of the global 2G mobile phone market." What does a Shanzhai phone look like you may wonder, well, pull out your phone and imagine it slower, cheaper, and way more defective. Shanzhai is another example of a protected Chinese company benefiting and profiting from stolen information. In the same article, the author interviewed legal expert David Wall of Leeds University, who stated "There is not an international copyright law that is enforceable in these cases. There are provisions under the 1886 Berne Convention for the Protection of Literary and Artistic Works, to which China is a signatory. Underlying all this, China does seems to fall behind many Western countries in terms of the strength of its IP (intellectual property) law regime – there is not a strength of culture of IP as we would understand it in the West. This may relate to China's apparently longstanding culture of copying – which may be something to do with the historical respect for the work of a master and not deviating from it." Respect is one thing, but theft is another.

According to U.S. estimates, American companies have lost around $50 billion in revenue on account of Chinese intellectual property theft as of December 2018, prompting heavy levies on Chinese imports from the Trump administration. You might not like tariffs, but imagine what would happen if a major American auto company went out of business because it couldn't compete internationally with its cheaper Chinese cousin?

The topic of military and economic competition with China will be a key foreign policy issue during the 2020 presidential election, and if the Chinese knockoffs start selling cheaper and start spreading wider across foreign markets, expect one campaign slogan to possibly be "Make Intellectual Property Great Again" or at least "Make American Cars Great Again!"

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Updated Jan 9, 2019 2:27 PM EST | More details


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