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Editorial: China looks to be serious about curbing industry theft

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Through the years it has been no secret that the rubber industry is—for lack of a better term—secretive. Companies work hard to develop new technologies and work even harder to protect these trade secrets from theft.

That was long one of the worries of firms looking to do business in China. The only way most foreign companies could set up shop in the Asian nation was through a joint venture. Numerous officials voiced reluctance in setting up JVs because the thinking was the partner would just get the technology, dissolve the partnership and use the intellectual property as it saw fit.

The situation got somewhat better as firms were allowed to set up wholly owned entities. Still, though, parts counterfeiting and IP theft remained a critical problem—both for the manufacturers and customers who weren't getting what they thought they were buying.

And for the most part, the Chinese government looked the other way, letting the blatant thievery go unchecked. There is some evidence, however, that the Chinese may be beefing up its enforcement efforts in these areas.

Two rubber industry companies issued news releases in recent weeks lauding the Chinese government for its efforts in fighting IP theft.

VMI Group said Chinese law enforcement agents raided a Chinese factory it accused of making tire-building drums it claimed infringed on VMI patents. Then Dow Corning Corp. said in a statement it appreciated the efforts of Chinese officials in trying to crack down on counterfeit tracking. The silicone materials firm said authorities had made several arrests and broke up a ring that was selling fake Dow Corning silicone sealants throughout regions of China.

And the Chinese government itself has been touting its efforts in 2014 to target specific industry sectors—including auto parts—that have been victimized repeatedly by IP thefts. It claimed it had investigated 50,000 cases and taken 8,300 suspects into custody during the first five months of this year.

At first glance it's a good start. But the progress must be watched carefully over the long term to make sure the successes are tangible and not just part of a clever PR campaign.