Wednesday, June 9, 2010

Do you know the terms KIRF and Shanzhai?

Let this article explain what is KIRF, shanzhai, and how they are affecting the Chinese economy.
China, with the recent Foxconn suicides, has garnered international attention and highlights it as a source of cheap labor to feed the world economy. However, China is also famous for being the clone factory of the world. People in China has no respect for "copyright", and this had lead to a ton of commercial friction between it and other companies and countries.

Microsoft recently is basically refusing to expand its operation in China, citing lack of intellectual property protection. Microsoft CEO Steve Ballmer stated recently that even though China has about 10-15% of global PC market, only 1% of Microsoft's revenue is coming from sales in China, when theoretically it should be proportional. Furthermore, Chinese government has recently announced a procurement policy that supposedly rewards "native innovation", which is interpreted as favoring "domestic clones" of foreign products. it was so alarming even US Secretary of Treasury Tim Geitner had to make a statement that he had talked to his counterpart in China and the policy will be modified and clarified.

Has China been turned into a country of cheap labor and clones? Let us check into the the phenomenon of KIRF, shanzhai, and the problem's roots.
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