Thieves and Politics

Dec. 21, 2004

According to a recent Manufacturers Alliance/MAPI Survey on Global Business Outlook, 2003, a major obstacle to doing business in China is fear of intellectual property theft. Indeed, 84% of the respondents stated that poor performance of new laws, combined with weak punishments, results in continuing intellectual-property-rights violations. Seventy-five percent of respondents noted that knockoffs of consumer products are prevalent in China, and 62% said piracy and counterfeiting of computer programs is widespread. "In any society you have people who are going to steal things," says Anand Sharma, CEO of TBM Consulting. "The only way to calm nerves is to have your own facility so there is no question of theft. Theft comes when you use outsourcing opportunities just as outsourcing -- not as an opportunity to add to your offering." In addition to theft, the MAPI survey respondents cited political barriers as a deterrent to doing business with China. In fact, 76% stated China has "opaque and inconsistently enforced laws and regulations and a lack of a rules-based legal infrastructure." Sixty percent of respondents cited corruption of Chinese officials and lack of independence and professionalism in China's court system. Additionally, 59% stated lack of uniformity and transparency in applying labor laws and regulations and restrictions on labor mobility.

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