China Stories Roundup
Traveling to Tokyo, Prague and Beijing in one week hasn’t left much time to blog. But the last few days, there were some interesting China stories, both dealing with intellectual property.
First off, to the embarrassment of Google, there appears to be lifting of “content” from Sohu.com when it comes to Google’s Pinyin input method editor (IME) for Chinese language. Now, it’s not unusual for folks to dissect and learn from each others’ code and language dictionaries, but this one seems to rise above the level of corporate intelligence. The way folks found out is because Google’s software gave the same wrong match that Sohu/Sogou’s software did. Whoops. This same phenomenon has been observed in mapmaking for centuries, where tell-tale errors indicate whether a map has been copied from another. Google has issued a mea culpa, which Fons Tuinstra has detailed. China Web 2.0 Review also has a good overview of the issue.
Second, the US is putting pressure on China over copyright infringement regarding films, music and software. In the balance are “two complaints to the World Trade Organization accusing China of unfair trade practices.” Yes, Hollywood and other firms have a case regarding IP, as 90% of the content here is pirated. In fact, it’s quite hard to find an establishment in China that sells them legally.
But let’s remember: it’s not going to amount to much in the grand scheme of things, in terms of trade imbalance. When the average salary of the PRC citizen is barely above US $100 a month, folks will not shell out US $10-20 for a legal movie or music CD. In Beijing, the CD/DVD shop at Oriental Plaza, just minutes away from the seat of the national government, carries all pirated discs. In short — it will be some time before the PRC consumer has enough disposable income to make the RIAA and MPAA happy with a big revenue stream.
The only real substantive issue is computer software. If you can make sure every business in China purchase legal copies of Microsoft Office or Adobe Photoshop, you might start seeing some real money that makes a difference. The key is making businesses step up to pay for licensed software, rather than depending on going after individuals. Better ROI on enforcement, and more willing payers.
April 10th, 2007 21:17
Maybe if the RMB was allowed to float, the average Chinese citizen could afford to buy foreign products legitimately.
April 10th, 2007 22:23
If one looks at the price curve, it likely wouldn’t make that much of a difference.
Even if the RMB were valued down to what economists say is a fair price (say 5 RMB/dollar) it would not fundamentally change the imbalance. If someone went from $120/month salary to $200/month, how much would that effect disposable income on media consumption to the levels that would put money in the pocket of US movie and record companies? Not much.
In general, PRC folks watch Chinese movies and listen to Chinese songs. It is only because the pirated DVDs of Western movies are less than 10 RMB that they are willing to buy. If it went from 10 RMB to 10 dollars a disc, you’ll see purchase rates plummet, except for the occasional hit like Casino Royale or Harry Potter. Even right now, at the low prices, outside the third ring road in Beijing the DVD sellers are chock full of Chinese DVDs, and not that many Western DVDs.
Likely, a bigger deal is the large number of expats, tourists and foreign students buying them at the sub-10 RMB rate, when they are in fact potential buyers of the real thing at the real price.