IWSF – Ch 271

“Imitation is the mother of creation,” as they say, so it’s commonplace for companies to copy each other and end up in lawsuits.

Didn’t Seosung Electronics, for example, engage in a monumental legal battle with Npple over smartphone design and technology patents?

But if it was just seeing and copying, this is simply copy-paste.

While companies in other countries might do similar things, it’s no exaggeration to say that China is the only country that engages in such behavior at the national level. If any other nation dared to do the same, they would have long been ostracized by the international community.

Autonomous driving technology and battery technology are deeply intertwined with China’s national interests. If we remain passive, they will continue to engage in similar acts without hesitation.

The faces of the two men stiffened as if they hadn’t expected me to say such things.

After a moment of silence, Minister Li Xuewei opened his mouth.

“What exactly are you implying?”

“If you didn’t understand, shall I say it again? Zhou Auto copied CarOS’s technology.”

Vice-Chairman Wang Yichang spoke as if in anger.

“On what grounds are you making such accusations?”

“The grounds are Zhou Auto’s own JW8, wouldn’t you say? Just comparing a few lines of code will reveal what they’ve copied.”

“What?”

His face slightly contorted at my words.

Minister Li Xuewei shook his head and said,

“Mr. Kang, it seems you are mistaken about something.”

“It’s not a misunderstanding, but the truth. If you apologize and compensate now, we will not pursue the matter further. Even this is a significant concession from our side.”

“Are you saying that Chinese companies are thieves?”

“If using someone else’s stolen technology is theft, then yes, it’s theft. Patent infringement by Chinese companies is nothing new, but this is a bit much, isn’t it?”

Then, Minister Li Xuewei retorted as if shouting,

“You should watch your words! Even the South Korean President wouldn’t dare to speak like that!”

Indeed, who would dare to speak carelessly to the Minister of Commerce who wields immense power over the vast Chinese market?

It’s only because it’s me that I’m saying this.

“The Tang Dynasty Chancellor Feng Dao once said, ‘Guhwajimun Seolchamshindo.'”

It means ‘The mouth is the gate of misfortune, and the tongue is the sword that cuts the body.’ In short, he was telling me to watch my mouth?

I countered his words.

“Since you’re mentioning Chinese proverbs, something comes to mind for me too. A famous robber from the Spring and Autumn period named Do Cheok once said, ‘Even robbers have a code of conduct.'”

I wondered if he understood it as meaning even thieves who steal from others have a minimum level of ethics, or if he took it as, ‘Who does this robber think he is, spouting nonsense?’

Minister Li Xuewei abruptly stood up from his seat.

“There’s no need for further discussion. I will not forget today’s events.”

With that, he stormed out of the hotel room.

Vice-Chairman Wang Yichang also rose from his seat. He spoke as if grinding his teeth.

“You will regret today’s events.”

I smiled and calmly replied,

“We’ll see who ends up regretting it.”

***

From Macau, I headed straight to Washington D.C. and joined up with Taekgyu there.

“How did the talks go?”

“Not at all.”

Taekgyu nodded as if he expected it.

“See? If they were the kind of people you could reason with, they wouldn’t have done something like that in the first place.”

“Well, at least we gave them a chance.”

I called Daryl and gave him instructions.

Following Zhou Auto’s autonomous vehicle announcement, China was in a state of euphoria.

Chinese media outlets reported the news daily, praising it endlessly, and the Chinese government announced deregulation, related law revisions, and administrative support.

Professors at national universities, commissioned by the government, poured out rosy predictions, saying that China would lead the future car industry and create 100,000 new jobs.

– Our technology level in China is this high!

– Now China is also leading in cutting-edge fields.

– I am proud that Zhou Auto is a Chinese company.

– It’s absurd that CarOS, which has only launched two car models, has a market cap of $200 billion. Once Zhou Auto starts mass production, they can easily overtake CarOS.

– Zhou Auto, fighting!

– Let’s show the power of the mainland!

But then CarOS threw cold water on this enthusiasm.

“Zhou Auto’s autonomous vehicle is suspected of copying CarOS’s technology. We urge the immediate suspension of sales of relevant vehicle models and an investigation.”

This announcement shocked people, and Zhou Auto’s stock price, which had been rising since the autonomous vehicle announcement, plummeted by 8 percent.

Zhou Auto immediately issued a rebuttal. Peng Yulan, head of the development team and chief technology officer, did not hide his displeasure.

“Zhou Auto’s autonomous vehicle is our own technology developed jointly with Baidu and WeChat. Just because CarOS launched first, does that mean other companies shouldn’t develop autonomous driving technology? CarOS should take responsibility for their baseless remarks.”

People’s Daily, Huanqiu Shibao, CCTV, and other media outlets deliberately criticized CarOS’s statement. However, instead of directly criticizing the American company CarOS, they subtly shifted the blame to Kang Jin-hoo.

Experts spoke in sharp tones.

“Kang Jin-hoo is disregarding Chinese technology!”

“He’s not an entrepreneur, but an investor. To be precise, he should be seen as a speculator.”

“He smells money and is clearly trying to extort money from Chinese companies by talking about patent infringement.”

“We must not succumb to such speculative behavior.”

“The Party and the people must unite and respond strongly!”

Chinese netizens were incensed.

– Kang Jin-hoo insulted China!

– Unbelievable. There’s a limit to how much you can look down on a great nation.

– Zhou Auto’s autonomous vehicle is pure Chinese technology jointly developed with Baidu and WeChat!

– Seosung Electronics itself used to copy Nokia in the past, and now they are copying Npple, aren’t they? Korea is the original source of Shanzhai (counterfeit goods).

– Chinese people suffer in life to maintain face even after death. But Kang Jin-hoo has completely ruined our face!

– Boycott all Korean products.

– From today, I’m cutting off all Korean dramas, movies, and variety shows.

– Let’s not go to Korea, and let’s not use Korean products!

– Ban all celebrities belonging to EDM Entertainment from Chinese broadcasts, and ban the import of movies and dramas invested in by EDM Entertainment!

– Let’s show them what happens when you insult China!

Retaliation was immediate.

Pictures of people smashing Eunseong Motors cars and Seosung Electronics smartphones and TVs were uploaded online, and protests continued in front of Litemart stores.

Korean companies with large sales in China were thrown into chaos. Eunseong Motors and Seosung Electronics were effectively completely shut down in China.

The Chinese government effectively banned Korean package tours, and the tourism industry, hotels, and duty-free shops, which heavily relied on Youker (Chinese tourists), suffered a major blow. The damage to Ceylon Hotel was also severe.

As China openly engaged in retaliation, dissatisfaction erupted across the political spectrum in South Korea.

Lee Jung-hye, a member of the Liberty National Party, brought up the losses of Korean companies and loudly demanded that Kang Jin-hoo immediately apologize.

Taekgyu said in disbelief,

“Whose side is that interference expert on anyway?”

“…”

At least not on my side.

I received a call from Chairman Im Jin-yong.

[Is it true that Zhou Auto stole CarOS’s technology?]

“Yes. That’s for sure.”

He sighed and said,

[Then this is no ordinary matter. Still, CarOS’s announcement was too hasty. Don’t you know what kind of country China is?]

“That’s why I did it. We can’t just let something like this slide.”

From my words, Chairman Im Jin-yong seemed to sense something.

[Do you have a solution?]

“Please trust me and wait a little longer.”

[Alright.]

I hung up the phone.

International relations are like the mafia world, where the logic of power is absolute. Punching people for no reason will ruin your reputation, but China isn’t a country that cares about such things.

In the end, the powerless just have to get beaten unilaterally. So, what’s the best course of action now?

Taekgyu grinned and said,

“We just need to bring in a big, tough guy who’s good at fighting.”

I nodded.

“Exactly.”

And I happen to be quite friendly with a big, tough guy.

***

Ronald Stamper.

A self-made man who rose from a real estate businessman to become the President of the United States without any prior public office experience.

When he was first elected president, the whole world was shocked, and all experts expressed serious concerns.

But what about now, a year and a half after his inauguration?

Surprisingly, Ronald has become the greatest president in American history. In a recent poll, he even surpassed Washington, Lincoln, Kennedy, and others to take first place.

The reason, of course, is the Big One.

The Big One is the largest disaster to ever occur on the U.S. mainland. The 9/11 terrorist attacks pale in comparison.

If Ronald hadn’t prepared in advance against everyone’s opposition, the United States would have faced the worst catastrophe imaginable.

But the United States successfully overcame the disaster, proving to the world why it is the world’s strongest superpower.

We met outside the White House, not inside.

Ronald greeted Taekgyu and me with a hearty laugh and a warm welcome.

“Hahaha! Welcome, come in!”

“It’s been a while, Mr. President.”

He pulled me into a tight hug, almost suffocating me.

“I know this friend is a busy man, but it’s hard to see his face.”

“You’ve been very busy, Mr. President.”

After greetings, we sat down.

“By the way, I heard you recently met with the Chinese Minister of Commerce. What’s the matter this time? Is it really true that Zhou Auto copied CarOS’s technology?”

“Yes.”

I summarized the situation so far and told him everything.

Ronald’s expression became serious as he listened.

“As you know, Chinese companies have been eroding our manufacturing competitiveness by infringing on patents all this time.”

In fact, Ronald had been consistently pointing out this issue since his campaign days. However, he had been too busy dealing with the aftermath of the Big One to address it.

I nodded.

“It’s safe to say that all companies operating joint ventures in China are having their technology stolen.”

However, they can’t give up the Chinese market. In the end, they are reluctantly tolerating patent infringement.

The Chinese government and Chinese companies are well aware of this fact and have become even more blatant in their actions.

In the past, there was a clear division of roles between the U.S. and China.

The U.S. produced high-value-added goods, and China produced low-value-added goods. Chinese-made toys, clothing, shoes, etc., flooded the U.S. market.

China became the world’s factory, exporting to the world and earning vast amounts of dollars.

The U.S. also had nothing to lose. The U.S. also gained a huge market, and new opportunities opened up for U.S. companies.

Thanks to this, the U.S. was able to achieve both growth and price stability from the dot-com bubble to before the global financial crisis.

But recently, Chinese companies are rapidly advancing into high-tech industries. They have become prominent not only in automobiles, ships, and aircraft, but also in the IT sector.

U.S. companies have produced countless technologies and patents, including smartphones, system semiconductors, autonomous driving, and electric vehicles.

However, Chinese companies are simply following what other companies are already doing. The number of copied business models is countless.

Baidu is imitating Gooble, Weibo is imitating Facenote, Alipay is imitating AMZ or Abebay, and Xiaomi is imitating Npple or Seosung Electronics.

Moreover, these companies did not compete fairly, but grew thanks to the support of the Chinese government and the sanctions against foreign companies. And with the technological prowess and capital they have accumulated in this way, they are now pushing out U.S. companies not only in China but also in the global market.

How can they sell smartphones with similar performance at less than half the price?

Of course, Xiaomi’s profit margin is low, but a bigger reason is that they do not properly pay patent royalties and spend less on development costs.

Global companies pour huge amounts of money into R&D every year. But Chinese companies don’t need to.

Because they can just copy.

The absurd fact is that they grow in size in this way, and then start buying patents, acquiring companies, and developing technology.

First, they copy and steal to grow as quickly as possible. And once they grow in scale, they buy what they need with money.

It’s an obvious tactic, but it’s unavoidable even knowing it. As long as they have the Chinese government backing them, it’s been an unfair game from the start.

Ronald folded his arms and said,

“Of course, they will deny it. Do you have solid evidence to prove your claims?”

“Yes. We found something important while looking for the technology leak route.”

Taekgyu handed over what he had brought.

“What is this?”

“It’s a board taken from a server made by SuperNano. A spy chip, too small to see with the naked eye, was embedded in the board. According to experts, this chip makes it possible to send data to other locations without going through normal processes, or to access it from the outside.”

Ronald’s eyes lit up at my words.

“Really?”

I continued,

“There are many companies and government offices using these servers now. If we investigate those places, we will find more.”

Then we can make this an international issue.