THE LONG MARCH-OUR TRANSFER OF TECHNOLOGY AND I.P. TO CHINA

The “Long March” was the strategic retreat of the Red Army led by Mao Zedong in 1934. It has become glorified by the People’s Republic of China as an example of the Communist Party’s strength and resilience. 

China has come a long way since 1934 becoming the world’s second largest economy and it has gotten that way not just by harnessing the know-how of the Chinese people but the know-how of the American people as well.

While there is talk of decoupling our economies today, for the last several decades, major American companies have introduced their technologies to China, for cash and for the opportunity of getting a share of a market of nearly one and a half billion people. 

This is not an all-inclusive list. For example, it does not include Apple on whose MacBook Air this blog post is being written. See https://nyti.ms/2UcwiKw 

General Instrument

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s most valuable semiconductor company, with a factory in Shanghai. Its customers include AMD, Apple, Broadcom and Qualcomm. See https://en.wikipedia.org/w/index.php?title=TSMC&oldid=985082323 On July 13, 1964 the New York Times reported that General Instrument, which was my late Father’s former employer, was rushing to complete a million-dollar (Note that this was 1964 dollars.) semiconductor plant to compete with Japan on the American electronics market. See https://nyti.ms/1RBCBOC   TSMC was founded in Taiwan in 1987 by Morris Chang. From 1958-1983 Chang was at Texas Instruments where he became the Vice President responsible for its semiconductor business.  The next two years he was President and COO of General Instrument. The government of Taiwan then recruited him to become head of its Industrial Technology Research Institute in charge of promoting industrial and technological development in Taiwan. He then became head of TSMC. Morris pioneered the then controversial idea of pricing semiconductors ahead of the cost curve, or sacrificing early profits to gain market share and achieve manufacturing yields that would result in greater long-term profits and was honored for doing this by an American university, Stanford.

Fiat-Chrysler

In 1979, American Motors, which then owned the Jeep brand and was subsequently acquired by Chrysler initiated discussions with the Chinese (not the Taiwan government) about building Jeep branded vehicles in China. The Chinese government agreed, the joint venture was called Beijing Jeep and in 1985 manufacture of the Jeep Cherokee commenced in China. Chrysler was subsequently purchased by Fiat and on November 20, 2014, Fiat Chrysler Automobiles (FCA) and Guangzhou Automobile Industry Group (GAC) announced a preliminary agreement to expand their current joint venture, including a second plant in Guangzhou, that would be responsible for all sales, marketing, product planning and after-sales support of a full line of Jeep, Fiat, and Chrysler vehicles, both locally made and imported. See https://www.allpar.com/world/china.html

General Motors

Fiat Chrysler’s competitor, General Motors, isn’t at all shy about its involvement in China. See https://www.gmchina.com/company/cn/en/gm/company/about-gm-china.html On that website GM writes, “GM and its joint ventures in China have more than 58,000 employees. GM, along with its joint ventures, offers the broadest lineup of vehicles and brands among automakers in China. Products are sold under the Buick, Cadillac, Chevrolet, Baojun and Wuling nameplates.” As for its technology, GM gloats that its “GM China Advanced Technical Center (ATC) is the most comprehensive and advanced automotive development center in China. It includes research and development, advanced design, vehicle engineering, powertrain engineering and OnStar laboratories. As a member of GM’s global engineering and design network, the ATC is developing solutions for GM on a domestic and global basis while supporting the company’s vision. The first phase of the facility opened in September 2011 and the second phase opened in November 2012.”

IBM

Another American corporate stalwart, IBM, sold its ThinkPad line of business-oriented laptop computers as well as its personal computer division to Beijing-based Lenovo in 2005. Lenovo’s founder said about that acquisition, “We benefited in three ways from the IBM acquisition. We got the ThinkPad brand, IBM’s more advanced PC manufacturing technology and the company’s international resources, such as its global sales channels and operation teams. These three elements have shored up our sales revenue in the past several years.” See https://en.wikipedia.org/w/index.php?title=ThinkPad&oldid=988007023 But that wasn’t the end of IBM’s sales of technology to Beijing-based Lenovo. IBM’s sold its Intel-based server lines, including IBM System x and IBM BladeCenter, to Lenovo in 2014. See https://en.wikipedia.org/w/index.php?title=Lenovo&oldid=987899309

Motorola

Motorola invented the first commercially available cellular phone small enough to be easily carried which was commercially released in 1984. Before the iPhone came out Motorola sold the wildly popular Razr, the best-selling clamshell phone ever made. Motorola’s cell phone business became Motorola Mobility, which was, from 2012-2014 part of Google, when it was sold to Lenovo. Lenovo originally sought to acquire Blackberry but that purchase was blocked by the Canadian government. See https://en.wikipedia.org/w/index.php? title=Motorola_Mobility&oldid=986872000

Tesla

The U.S. government made no objection to Lenovo’s acquisition of Motorola together with 2000 patents nor to any of the above transactions nor to Tesla’s construction of a car plant in Shanghai. See https://www.bbc.com/news/business-50080806

Blackberry (Note this is a Canadian company.)

Incidentally, Blackberry ended up licensing the manufacture of its phones to TCL Technology, located in Guangdong province in China. That license expired this past Summer.

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About ERIC WACHSPRESS

The material on this website is for informational purposes only. It should not be considered legal advice and is not intended to create an attorney-client relationship. If you have questions regarding any material presented herein, we recommend that you consult an attorney. This web site and information presented herein were designed in accordance with Illinois law. Any content in conflict with the laws or ethical code of attorney conduct of any other jurisdiction is unintentional and void. I am a Chicago attorney practicing in the areas of trademark, copyright and information technology law as well as general corporate law. Formerly a trademark examining attorney with the United States Patent and Trademark Office, I have been in private practice since 1987 representing clients in a wide variety of industries, including the consumer products, financial services, information technology and entertainment industries. You can contact me at markscounsel@gmail.com, by phone at 773.934.5855 or by mail at 417 S. Jefferson St., #304, Chicago, IL 60607 USA
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