How China Competes

I have written about how China uses currency manipulation to create a "low-cost labor" image around the world. But there is a more insideous side of China's economic policy: theft.

For those who argue it is simply "free trade" and "good economics" to source in China, perhaps they might want to read the following:

• Inc. Magazine

China's national industrial policy facilitates forced technology transfer to Chinese industries. One new mechanism is the so-called CCC safety certification. Every electronic component or piece of equipment to be sold in China must be submitted to the Chinese government body overseeing the CCC certification. The process requires the foreign manufacturer to give Chinese officials full access to engineering drawings and schematics and to provide a complete finished product for evaluation. In addition, the applicant companies must pay for Chinese officials to visit and inspect their factories outside of China.

• Voice of America
• U.S. State Department
  
• U.S. State Department (2)
• Public Broadcasting System

I'm not sure if those economists are ignoring this issue because it is inconvenient to fit it into their "free trade" philosophy or because they view it as unimportant. Either way, this is an example of how China steals jobs, business, and profits from the world... especially the U.S.