Estimates of the cost of Chinese piracy to the US economy was estimated at $50 billion in 2011 alone. Another source of American frustration is the official Chinese policy of ‘indigineous innovation’: innovation through the assimilation of imported technologies.
The result of Chinese imitation, however, is affordable products and services that allow millions to enjoy the trappings of a consumer society. Wealth creation through copying aids the growth of a Chinese middle class who can afford to buy the original. Valuable design and manufacturing skills are gained through copying goods produced elsewhere.
In addition, copying has produced Chinese ‘imitator-innovators’. Weibo began in 2009 as a Twitter clone, but has since added features to make it more interactive and arguably more fun than the original. Youku, a Chinese copy of YouTube, started with unathorized programming. Today it may have surpassed its US rival in delivery of original content.
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It is of note that “China’s knockoff economy… is itself a knockoff.” Copying used to be the American way. The US engaged in economic espionage against the British, allowing it to grow in the 18th and 19th century.
Similarly, just as the British overstated the threat posed by American copying then, the Chinese threat is overblown today. Stronger intellectual property rights do not always lead to better outcomes, as it may inhibit as well as incentivize innovation. It is worth keeping Chinese copying in perspective, and recognize its benefits as well as its costs.
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