Home >
Entertainment And Recreation
It turns more and more obviously that one of the most interesting
things about China is the relationship between the western industry
and local China's suppliers. IP laws are a challenge so anything
remotely sophisticated or technologically advanced needs to be guarded
well and yet the market is so big that if you are not happy about
supplying, your competition will be. So what do you do?
Walking a thin wire is what most big suppliers are doing in China. The
idea is to supply to the China's industry and yet keep your secrets
to yourself. If you re BorgWarner - which has three joint ventures
and one wholly owned subsidiary in China - you make the simple things
in the joint-venture plants where they will leak but will not really
damage and the real complicated stuff in the wholly owned subsidiary
where you can guard it with your life. And if BorgWarner's man-in-
charge Freeman Shen can admit it without any qualms in front of a
packed audience then that must be the way to do things in China.
Going by how things are in China, it sounds like everyone is gleefully
sleeping with the enemy, while on Viagra, and yet remembering to wear
a rubber.
The same approach is often used when developing Tier 2s. You handle
everyone and everything with the clinical precision of a surgeon. One
does need China's Tier 2s as those are the guys that will drive costs
down and yet one has to be careful on the quality front and the
secrecy front. So plastics in China, but forgings in India (where they
have apparently greater expertise) and electronics and embedded
software in an underground facility in Sacramento. And yet electronics
is what will be the cheapest to manufacture in China, says the top guy
in strategy for TRW in China. So what does one do? Perhaps manufacture
in China and breed a large number of sniffer dogs? The practice is
often to manufacture 99% of the stuff in China and leave that vital 1%
to your home base.
Suppliers like BorgWarner employ other means of IP protection as well.
The supplier has decided to put all its future apples in a basket
called Ningbo so that it generates a large number of jobs in the area.
Then it simply tells the local state government that we employ your
guys so you better protect our IPs.
Source: News.tootoo.com (http://news.tootoo.com/)