Should American Companies Sacrifice Intellectual Property For Short-Term Profit ?

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For American automakers, the act of selling electric vehicles in China would be a poor financial maneuver in the long run. This is due to China's high tariffs and past copy-cat nature of business building.

According to this article, the people of China already make electric cars for themselves and can support the decrease of greenhouse gases – required for the countries overall health- by themselves. The country has enough money to create and sell its own products to its own people. This idea is implied in the high tariffs the country imposes on certain imported goods. Assuming the imported goods were essential, China would have no reason to charge importers excessive amounts of money before even making a sale to the Chinese consumer. Doing this would scare importers away and could be financially detrimental to the survival of its citizens. Therefore, China has very clearly illustrated that it doesn't need automobile importers. Foreign automobile importers need to realize this fact. High tariffs would eliminate most profits made after imports and still leave car importers scrambling for a sale in a crowded car-sales market.

Even China-based joint ventures between American car companies and Chinese car companies might result in intellectual property theft based on China's history of allowing “copy cat” companies to operate within its borders. China's ability to manufacture cheaply and produce quickly might end up leading them to capture more market share in countries accepting their own Chinese imported vehicles. For example, a Chinese company -armed with stolen intellectual property- could import a cheaper version of an American-style car back to America and acquire more market share than the original American company that created the idea. From this hypothetical result, it would seem almost unwise for car makers outside of China to enter into joint ventures of such nature without questioning their own business savvy.

American car companies have more to lose than to gain from importing their cars into China. The seemingly attractive car sales opportunity might lead to Chinese companies paying American car companies for the “right” to copy patented technologies in order to boost the Chinese economy through the reselling of those American-patented technologies in future Chinese cars.


Ugochukwu A.

Ugochukwu A.

Atlanta, Georgia, United States

I keep an eye on a plethora of articles across platforms such as BusinessInsider, Bloomberg, TechCrunch and others. I'm interested in innovative companies and how they can help people. I am open to writing about any topic.

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