Increased Shipping Rates from China

[Shadders]

Hi,

Being in the UK, i am not sure i understand the comments.

 

Does increasing the import duty on non-USA goods mean that they become more expensive, allowing USA companies to compete ?

 

Isn't this a good thing ?

 

I purchased some PCB's from a UK supplier, and compared to the Chinese offerings - Chinese manufacturing was approximately 1/5 to 1/8 of the UK price. In some instances, the air freight costs, cost more than the manufactured PCB's.

 

I will always buy British where possible. Using offshore is a race to the bottom. Once all the technology services are offshore - then this is only detrimental to the country. Loss of companies and revenue generation, and more importantly, loss of experienced engineering people.

 

It is the same for the UK Nuclear industry - we are outsourcing this to China where the cost per kWh is twice (2x) that of the current energy costs - all because the UK government fails to understand the long term investment requirements. The UK companies will decline in this industry, experts will sadly pass on, and we will have no experts in this field in the UK.

 

Every countries strategy should be to ensure that they retain expertise and manufacturing - once it has disappeared, then it is much harder to get back.

 

Regards,

Shadders.

[jtwrace]

3 minutes ago, Shadders said:

Hi,

Being in the UK, i am not sure i understand the comments.

 

Does increasing the import duty on non-USA goods mean that they become more expensive, allowing USA companies to compete ?

 

Isn't this a good thing ?

Oh wow, finally someone that gets it.  😁

[John Dyson]

21 minutes ago, Superdad said:

 

Specialty silicon chips (high performance voltage regulators, FPGAs, high-speed isolators, clocks, DACs, etc.) and better spec'd passives (such as Murata MLCCs, etc.) are not available any cheaper to manufacturers in China than to any US manufacturer.  And I've yet to read of any counterfeit Linear Tech LT3045 or Silicon Labs clock synthesizer.  So it is not as if they can clone and produce for significantly less--though of course they can choose to operate on extremely thin margins.

Yea -- they haven't spied enough to get the IP for the other firms.  One reason for the so called 'experts' at tech  is gathering information from the US (not all of the reasons, there is some research happening in China as an arm of the PLA.)  Refer to stealing of GaN technology and other things like that.  (GaN in the past is a vital military technology WRT radar.)

Why do the research in the US if the companies lose their IP to competitors (by theft)?

IP is another reason (perhaps more strategically) for convincing China to do the right thing than even the job-leakage.  Eventually, engineering will be destroyed in the US (it already has been iimpacted.)

China is sovereign -- they secretly don't have to follow the rules?  Who is going to put the PLA in jail?

 

John

[new_media]

31 minutes ago, Shadders said:

Every countries strategy should be to ensure that they retain expertise and manufacturing - once it has disappeared, then it is much harder to get back.

 

So that's the problem in the US. There already aren't enough suppliers of components and raw materials in the US to meet demand; in some cases none at all.

 

US manufacturers are forced to pay higher prices to foreign suppliers because there is no other option, and in many cases those higher prices get passed along to consumers. Maybe that will change over time but there is some short-term pain involved.

[Superdad]

I agree 100% that IP theft is a serious problem.

 

I agree 100% that the US has ceded a lot of its manufacturing edge to other countries (our failure to support solar panel and advanced battery manufacturing is especially disturbing).

 

I (and most economists and farmers) disagree 100% that escalating a trade war via wildly increasing tariffs is the solution.  We are just moving the tax burden around.  

The US government has already paid out close to $8 billion to farmers in an attempt to ease the pain brought on by this trade war.

And yet Trump quite literally boasts that the Chinese are paying us billions in tariffs and strengthening our economy--when the opposite is the case since it is US businesses paying these tariffs, and soon consumers will see the cost of many goods rise.

 

[jtwrace]

You can't please everyone it's nearly impossible.  However, as a small business in the USA you can certainly do your part and that starts by sourcing parts in the USA and not pointing fingers at the White House.  While I don't like Schitt sonically, one has to admire their model and its success.  They have proven that it can be done on US soil and I've said it for years that it can.  

[Ralf11]

why can't we source semi's from India?  Thailand, Vietnam, Mexico, Brazil?  we can help them ramp up production or build new fabs (like TSM in Taiwan)

 

ultimately, the cost of manf. will be determined by who has the latest robots, not the cheapest labor

[John Dyson]

1 hour ago, Superdad said:

I agree 100% that IP theft is a serious problem.

 

I agree 100% that the US has ceded a lot of its manufacturing edge to other countries (our failure to support solar panel and advanced battery manufacturing is especially disturbing).

 

I (and most economists and farmers) disagree 100% that escalating a trade war via wildly increasing tariffs is the solution.  We are just moving the tax burden around.  

The US government has already paid out close to $8 billion to farmers in an attempt to ease the pain brought on by this trade war.

And yet Trump quite literally boasts that the Chinese are paying us billions in tariffs and strengthening our economy--when the opposite is the case since it is US businesses paying these tariffs, and soon consumers will see the cost of many goods rise.

 

Eventually, we should provide the exact same economic welcome that China does.  The ONLY way to deal hard with hard dealers is to deal hard :-).  Note that most of the consumers 'paying the tariffs' are significant consumers of goods.  I frankly don't care if a TV set costs $20 more for a while...  I don't care if my shirt costs $1 more...  If worried about the poor -- they aren't sigificant consumers anyway -- or shouldn't be.  There are a lot more poor people than I am poor, carrying around cell phones that literally cost 20X more than mine -- I'll bet that mine has just as many *actively useful* features for MOST people as an Iphone .  Buying/renting/leasing an Iphone because it is pretty and the 'thing' to get is stupid, but a lot of people do silly things.  Most people do not think analytically -- I DO.

 

*Do you think that China is going to be 'nice guys' and trade fairly and follow the rules?  Hmmm...

 

I gotta have this, I gotta have that -- it is killing our nation.  We need someone standing up for proper trade relations -- absolutely no President since Reagan has done so -- and Reagan wasn't all that great WRT trade.  Our Presidents & other aspects of government  have sold us out because of 'political religion' reasons, and at least we now have forward movement.  Love Trump/hate Trump -- this isn't the issue, it is proper, fair trade -- 'fair trade' (as a noun) is siily.  We need fair trade...

Sort term 'tax' for longer term benefit.  We let China be a problem -- all of this silly 'open trade' a kind of NAFTA mentality is simple self-destruction ---  PERIOD.  Trade should be for both long term and short term benefit.  Short term pain is okay, but weak Americans 'complain' -- ohhhh, it hurts...  Suck it up for a while (that is my attitude...)   We  have no problems withi access to food -- we have problems with access to GOOD middle income jobs -- but our politicians have TOTALLY sold us out.  Whether or not someone likes the current President -- he SOMETIMES does the right thing.  SOMETIMES our politicians do the right thing for us -- but the companies depending on China haven't done the right thing for our 'middle class'  people. (I totally detest the term class in this regard -- but it gets the point across.)

 

I have always been somewhat strategic in my own behavior -- tactical can be stupid without strategy.  Companies say gimme, gimme gimme RIGHT NOW.  We ned more thinking:  What about the future?  This is an issue for EVERYONE.

 

John

 

[Richard Dale]

1 hour ago, Superdad said:

I agree 100% that IP theft is a serious problem.

Is it a problem? What does the term 'intellectual property' actually mean? Can you provide examples what 'serious problems' have been caused by China 'stealing' intellectual property'?

 

I ask these questions because in the software world, patents on software are regarded as a bad idea by most people who actually develop software. Software people value maximum collaboration between anyone who can contribute whether it be a 14 year old American school kid, Chinese phd expert ,  a smart dog or whoever. A company adds value by being able to leverage the common pool of 'intellectual property' faster than the other guys.

 

Using patents to establish artificial monopolies on 'intellectual property' doesn't make any sense in that context. To me as a software guy, patents don't make sense in general, and my feeling is this idea of 'defence of American intellectual property' thing is just protectionism.

[Superdad]

1 hour ago, jtwrace said:

You can't please everyone it's nearly impossible.  However, as a small business in the USA you can certainly do your part and that starts by sourcing parts in the USA and not pointing fingers at the White House.  While I don't like Schitt sonically, one has to admire their model and its success.  They have proven that it can be done on US soil and I've said it for years that it can.  

 

Funny that you mention Schiit Audio.  Because I think it was you who back in 2014/15 turned me on to the PCB assembly house in Simi Valley that they use.  Great people.  Really liked working with the owner there.  From Feb. 2015 to September 2017 UpTone spent just under $200K with that firm.

I am not naming them here because of what I am about to say next.  Their prices were competitive, but the quality of their work and the QC was rather poor.  Would find solder splashed everywhere, huge solder bridges--even on big TO-220 size 5-pin regulators--and they got some parts too hot during processing.  They often forgot to clean the excess flux off our boards.

And as a turnkey house (where they order and kit the many parts based on our BoM) they were really weak.  They took way too much time to get parts on order, and then once they did they often fell weeks behind promised dates--and then not even communicate to us about it.  If a part was out of stock, they would just put the order on the back-burner--whereas if they had told me I could easily spec a substitute.  And that was on relatively simple boards (original USB REGEN, MMK, and JS-2).  I declined to even have them bid on our UltraCap product which has 275 parts--some very small.

 

I know you hang out over as ASR Jason.  So I am sure you have seen Amir's Schiit tear-downs and the many examples he has photographed showing splashed bits of solder and uncleaned boards.  I have a whole folder of photos of UpTone boards with solder bridges by this firm if you want to see. 

I have gotten quotes from other PCB assembly houses in the USA, but they were double.  So we stay with our Canadian firm (who has production lines in both Toronto and Shenzhen) as their communication and quality is excellent, and their performance to promised delivery dates is flawless.

 

And speaking of PCBs, the bare/unpopulated boards used in Schiit Audio products are produced in China (I know this since the assembly firm we shared for a while routes all their PCB fab biz through the same rep/coordinator.  

And BTW, those MCI transformers Schiit uses?  China or India... 

 

So while the companies Schiit buys from are located in the USA, not all the parts are made here.

[Superdad]

1 hour ago, Ralf11 said:

why can't we source semi's from India?  Thailand, Vietnam, Mexico, Brazil?  we can help them ramp up production or build new fabs (like TSM in Taiwan)

 

ultimately, the cost of manf. will be determined by who has the latest robots, not the cheapest labor

 

The countries you mention don't really have the expertise and skilled labor for high-tech manufacturing.  Otherwise you would already see phones and other silicon-dense products being made in those places.  

 

And if the US s going to invest in education and production facilities I'd much rather it be here!

[Ralf11]

22 minutes ago, Richard Dale said:

Is it a problem? What does the term 'intellectual property' actually mean? Can you provide examples what 'serious problems' have been caused by China 'stealing' intellectual property'?

 

I ask these questions because in the software world, patents on software are regarded as a bad idea by most people who actually develop software. Software people value maximum collaboration between anyone who can contribute whether it be a 14 year old American school kid, Chinese phd expert ,  a smart dog or whoever. A company adds value by being able to leverage the common pool of 'intellectual property' faster than the other guys.

 

Using patents to establish artificial monopolies on 'intellectual property' doesn't make any sense in that context. To me as a software guy, patents don't make sense in general, and my feeling is this idea of 'defence of American intellectual property' thing is just protectionism.

 

There are legal definitions of IP.  you might check to see if there is a Wiki, and can also use Black's legal Dictionary.  Beyond that, there are treaties, not to mention

 

Yes, there are a number of serious problems caused by China stealing intellectual property.  PBS just did a Frontline episode on it, besides the use of Chinese military assets to crack into US businesses and steal their IP and trade secrets.

 

Patents are distinct from copyrights, and other forms of legal IP protection.

[Ralf11]

12 minutes ago, Superdad said:

 

The countries you mention don't really have the expertise and skilled labor for high-tech manufacturing.  Otherwise you would already see phones and other silicon-dense products being made in those places.  

 

And if the US s going to invest in education and production facilities I'd much rather it be here!

 

Taiwan certainly does, as does SK.  The other countries I mentioned are developing this expertise.

 

I suggest that such US investment can be made in the rust-belt and on Indian Reservations if they want it.  High cost of living means it won't work well in trad. high tech areas.

 

I am not sure I want it limited ot the US however.  It is good to have allies (just ask the Athenians).  If there is really going to be an unfortunate coldish war with China, allies can be useful.

[Richard Dale]

4 minutes ago, Ralf11 said:

 

There are legal definitions of IP.  you might check to see if there is a Wiki, and can also use Black's legal Dictionary.  Beyond that, there are treaties, not to mention

 

Yes, there are a number of serious problems caused by China stealing intellectual property.  PBS just did a Frontline episode on it, besides the use of Chinese military assets to crack into US businesses and steal their IP and trade secrets.

 

Patents are distinct from copyrights, and other forms of legal IP protection.

You haven't provided an actual link to a legal definition of 'intellectual property'. As far as I know it doesn't exist in a legal sense. What does 'PBS just did a frontline episode on it' mean in itself?

[John Dyson]

41 minutes ago, Richard Dale said:

Is it a problem? What does the term 'intellectual property' actually mean? Can you provide examples what 'serious problems' have been caused by China 'stealing' intellectual property'?

 

I ask these questions because in the software world, patents on software are regarded as a bad idea by most people who actually develop software. Software people value maximum collaboration between anyone who can contribute whether it be a 14 year old American school kid, Chinese phd expert ,  a smart dog or whoever. A company adds value by being able to leverage the common pool of 'intellectual property' faster than the other guys.

 

Using patents to establish artificial monopolies on 'intellectual property' doesn't make any sense in that context. To me as a software guy, patents don't make sense in general, and my feeling is this idea of 'defence of American intellectual property' thing is just protectionism.

Patents aren't bad -- misuse of patents IS bad.  I have seen some really stupid patents (I have to work around some Dueseys -- comes from the automobile manufacturer), but I REALLY DO believe in IP.

 

I am writing (and been successful) quite complex and difficult to replicate software -- I don't want anyone stealing it.  I have unique set of abilites (all of my faults notwithstanding) and don't want someone else to take advantage of my hard work.  I guess that makes me selfish.  Not all software is 'yet another compiler', or 'yet another accounting system.'

 

Sure a group of programmers who collectively write a well understood program like yet another OS (been there, done that), yet another compiler (well, I have written one for commercial purposes, but that was MANY years ago -- when compilers were simple).  THOSE subjects are well understood, and I respect the idea that those who write those programs don't worry much about IP - -THEY MOSTLY HAVEN"T INVENTED ANYTHING.  Keeping such softtware private is kind of silly from an IP (theory) standpoint, but from a work-product effort standpoint, there is something to be said for keeping that kind of  IP in commercial situations (think barrier to entry.)

 

Much NEW  IP IS expensive to achieve -- but stealing it is really simple.  Costs money to create innovative IP -- so where are the US profit centers to pay for creating/inventing/developing new IP?  Once things fall to a certain point, WE WONT EVEN BE DEVELOPING NEW IP.

 

So, I don't believe in 'free' software as a culture.  I think that it is GREAT to choose to free your own intellectual property (I have done that A LOT -- more than most free softare advocates), but to futher encumber binaries with 'free, but not really' seems a little dishonest to call or even think that it is free.  (I dont' know if you know, but back in the day, I rightfully thought the GPL cult as a religion -- and that is perfectly okay -- just don't call the workproduct 'FREE', because it isn't.)  Also, GPL is kind of good for collective efforts -- see, not arguing against GPL -- just the propaganda (and implied/inferred propaganda) associated with it...  If talking about really free software -- then I like it, and it is fair to call it 'free'.

 

BUT THE ABOVE IS NOT WHAT WE ARE TALKING ABOUT.  What China perpetrates are both theft and coersion to suck US IP dry.

 

Yet another compiler collaborative project, yet another OS collaborative project, yet another LR parser, yet another this or that, especially in a collaborative project -- okay, free the software -- BUT REALLY FREE IT.  What REALLY competent and experienced software developer hasn't written (or been intimately associated with) numerous kinds of programs whose theory is well known?  THAT kind of IP is cheap (in the sense of commonly available, but not the learning part), but the development costs and the limited number of developers is a major issue.

 

My successful project has been attempted off/on for 30yrs, with essentially zero success (dont' count that silly plugin -- Satin stuff) as any competition to my project.  I really don't want anyone stealing it or even know how I did it.  I am willing to sell the development service, if desired.  Also, when I publish a paper (which is already being talked about it), PLEASE let me present it -- not someone else who hacked my computer and stole my hard earned work product.

 

John

[bluesman]

8 minutes ago, Richard Dale said:

Is it a problem? What does the term 'intellectual property' actually mean? Can you provide examples what 'serious problems' have been caused by China 'stealing' intellectual property'?

 

I ask these questions because in the software world, patents on software are regarded as a bad idea by most people who actually develop software. Software people value maximum collaboration between anyone who can contribute whether it be a 14 year old American school kid, Chinese phd expert ,  a smart dog or whoever. A company adds value by being able to leverage the common pool of 'intellectual property' faster than the other guys.

 

Using patents to establish artificial monopolies on 'intellectual property' doesn't make any sense in that context. To me as a software guy, patents don't make sense in general, and my feeling is this idea of 'defence of American intellectual property' thing is just protectionism.

 

I think your generalization may be a bit too broad, Richard.  The general objections to software patenting are that it stifles innovation, exposes small businesses to inappropriate legal and financial risk, makes both standardization and interoperability difficult, and pushes creators / owners to try to both patent their code before it's fully ready for production and intentionally leave it without necessary changes that would improve functionality but not be covered by the existing patent.  These all seem valid to me, but I don't think they justify the elimination of patentability of software (which is under active consideration right now and could happen soon).  There's another side to this story of equal importance.

 

As the creator and (until I sold them) vendor of a few major healthcare software packages, I can tell you with great certainty that I would have gotten a lot more for my work if it (and I) had been protected more fully. The largest one was the first and only package of its kind for about 5 years.  It had about half a million lines of code in it and was sufficiently robust to defy simple copying or reverse engineering.  But if I hadn't sold my IP, the purchaser (who contacted me after hearing about what I'd done) had sufficient motivation and in-house talent to create a competing package.  They bought mine as much to save time as because it was so good.  Interestingly, they decided to "improve" on the product within 2 years and succeeded only in making it less desirable - it's still on the market but has dropped off in popularity since they messed it up.

 

The answer to your first question is easy: there are many documented examples of Chinese thefts of intellectual property and the resulting serious fallout.  Start with American Superconductor and Sinovel in 2005.  AMSC (an MIT spinoff) developed the world's best wind turbine control software.  After Sinovel (a Chinese wind turbine maker) got all the AMSC software from one of their turbines, AMSC had to lay off more than half of their workforce and their market cap fell by half. Sinovel and a few employees were convicted in the US a few years ago, but they'll never be held accountable.

 

Then there's Monsanto, who spent over a billion developing advanced corn seed then stolen by the Chinese  In 2016, one of the conspirators was sent to a US prison, but the rest got away scott free.  Or consider Avago (now Broadcomm), who spent $50 million on thin-film bulk acoustic wave resonator technology (an essential component in modern cell phone systems) that was then stolen by the Chinese, who formed a company to make the same thing several years before the theft was discovered.  Or you might think about Allen Ho, a naturalized American citizen from Taiwan who used his company Energy Technology International (in Wilmington, Delaware) to gather information on the production of nuclear material from American nuclear power developers (e.g.TVA) and give it to the China General Nuclear Power Company.

 

There are many, many clear cases of serious harm from IP theft by the Chinese.  Google the Green Dam-Youth Escort software theft from Solid Oak Software, a California company who had to resort to Dropbox for communication because DOS attacks shut down their network after they sued.  The cyberattacks stopped as soon as the case was settled. This is truly bad stuff!

[Ralf11]

28 minutes ago, Richard Dale said:

You haven't provided an actual link to a legal definition of 'intellectual property'. As far as I know it doesn't exist in a legal sense. What does 'PBS just did a frontline episode on it' mean in itself?

 

I provided ways for you to educate yourself about this issue, which is sorely needed.  If you are so lazy you need to have a link posted, then I cannot help you.

[John Dyson]

I am sort of finished discussing this -- I think that bluesman hit the nail on the head for me.  We all should accept that there IS a problem, but maybe differ on how/what is addressed.

Political or psuedo political politics upset me when trying to stay away from that stuff.

Even arguing audio is more tolerable than politics (be it IP or whatever the orange guy is trying to do to help.)

These are complex issues .  Audio is less complex (even though some might disagree :-)).

 

John

[Shadders]

2 hours ago, Richard Dale said:

Can you provide examples what 'serious problems' have been caused by China 'stealing' intellectual property'?

Hi,

As below :

https://www.businessinsider.com/9-photos-of-j-31-chinas-copycat-version-of-the-f-35-stealth-fighter-2018-10?r=US&IR=T

 

Not sure if a serious problem will appear.

 

Regards,

Shadders.

[Richard Dale]

15 hours ago, Ralf11 said:

 

I provided ways for you to educate yourself about this issue, which is sorely needed.  If you are so lazy you need to have a link posted, then I cannot help you.

Thanks for pointing out my shortcomings.

 

I'm sure the term 'intellectual property' will appear in a legal dictionary, but that doesn't mean that there is a legal definition of it. The term just covers various types of laws about intangible things, which have no legal connection with each other, such as copyrights, patents and trademarks amongst others.

 

If some politician is waving their hands in the air saying 'China is stealing our Intellectual Property', I personally suspect they might be introducing protectionist measures under the guise of stopping the stealing. Of course that doesn't mean the Chinese companies and the Chines government haven't committed crimes against the United States such as industrial espionage as some of the posts on this thread have pointed out.

[Ralf11]

intellectual property has legal definitions - you can look them up

 

no way to avoid the fact that China has stolen intellectual property and continues to do so

[BrokeLinuxPhile]

When I worked at Nortel, the chinese wrote a custom worm targeting us, and it sneaked right through corporate security measures.  It was amazingly aggressive and tough to kill.  Eventually, it contaminated the entire network, even machines in the lab I worked in got hit.  When it had activity peaks, whole segments would go down.  Nortel went bankrupt, sold off assets, then got sued because the assets were STILL highly contaminated with chinese sourced spyware.   The data on the servers, our many years of hard work, had all been stolen so it was now worthless in terms of dollar value.

 

Here's a nice read for you on how high up this espionage goes in chinese govt:

 

https://www.afr.com/technology/web/security/how-chinese-hacking-felled-telecommunication-giant-nortel-20140526-iux6a

 

It literally had a major effect on our downfall.  Granted, a lot of our problems had to to with senior officials being liars.  But then again, this was one of the things they were lying to us/ the public about.  They knew our IP was worthless but tried to hide that fact.

[BrokeLinuxPhile]

Hacking saves development time.  One company invests a fortune writing a customized software package.  Another comes along and steals it, investing nothing in R&D, coming to market at the same time, with no apologies.  That's why it needs to be stopped.  No  shortcuts, earn it.

[John Dyson]

The attitude of those who spy against us (the IP producers like NA,  EU, UK, JP, SK, OZ countries):  IP is free for the me (the thief), not free for you (the IP owner.)

 

John

[bluesman]

44 minutes ago, BrokeLinuxPhile said:

Hacking saves development time.  One company invests a fortune writing a customized software package.  Another comes along and steals it, investing nothing in R&D, coming to market at the same time, with no apologies.  That's why it needs to be stopped.  No  shortcuts, earn it.

 

I totally agree with your concept and approach - but using the term "hacking" may mislead those who don't understand the difference between creative hacking and malicious hacking.  Hacking used to mean bad computer behavior like breaking into & stealing from databases and systems or planting malware. But hacking today is also a term for rapid-fire sessions ("hackathons") for creation of apps and other problem-oriented coding projects.  It's important to know which is which to avoid condemning beneficial hackers.

 

I just don't want anyone to misunderstand the good that comes from positive hacking and hackathons.  We run one or two every year at the academic medical center in which I teach & do research.  Teams are given a problem and 2 or 3 days to come up with a workable solution, e.g. improve patient access to their medical records or use demographics for efficient pre-ordering of some components of inpatient care.  Many of our students work around the clock in a truly impressive display of youthful exuberance - the rest of us have to sleep a bit and eat more than Pringles 😁 The prizes, contributed by some of the largest businesses in the region, are both monetary support and career-building opportunities.