MESSAGE
| DATE | 2020-08-16 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [Hangout - NYLXS] time to end the china sham
|
https://www.wsj.com/articles/how-chinese-officials-hijacked-my-company-11596233617?mod=opinion_lead_pos6
Opinion | How Chinese Officials Hijacked My Company
Steve Saleen
6-7 minutes
President Trump said last month that talks for a phase 2 trade agreement
with China were on the back burner. If they resume, it is more important
than ever that any deal protect American companies and their
intellectual property from theft by China. My experience doing business
in China shows the lengths to which the Chinese government will go to
steal American intellectual property.
My story began in 2016, when I entered a joint venture with the
government of Rugao, a city in Jiangsu province with a population of 1.4
million. Rugao needed expertise to start an automotive manufacturing
company that would create jobs.
I would bring experience, design, engineering and related technologies
developed over my 40-year career in the automotive industry building
race cars and high-performance street cars. My contributions to the deal
were valued at $800 million, and I would maintain a majority stake in
the new company along with my American partners. Rugao would bring $500
million in capital and $600 million in subsidized loans over three years
to fund manufacturing sites and operations, and receive a minority stake.
The deal was a sham. It was a trap designed to secure my intellectual
property, then use intimidation tactics and lies to nullify the
agreement and seize control.
The first few years of the venture, named Jiangsu Saleen Automotive
Technologies, were relatively smooth. I contributed three well-designed,
well-engineered vehicles, hired staff, set up supply chains and launched
marketing. The Rugao government contributed some of the promised
capital, but nowhere near the amount needed to get operations up and
running at scale.
I would later find out that while I was busy fulfilling my end of the
bargain, the joint venture applied for 510 Chinese patents for my
designs, technologies, trade secrets and engineering developments. Most
of the patent filings didn’t even list me as the inventor. With many of
these Chinese patents approved, Rugao was ready to take over the joint
venture and steal the intellectual property.
Rugao is now claiming the initial valuation of my contributions was
based on false information. But the city government itself requested,
verified and accepted the valuation, picking at the outset three
separate firms to conduct independent appraisals. The government never
contested any of what these reviews found. In the past three months,
Rugao has demanded the valuation companies say their findings were based
on false information.
You could ask Grace Yin Xu about this—if you could find her. Grace is a
Chinese national who serves as the director of corporate affairs for
Jiangsu Saleen. In the early stages of the deal Grace was a liaison
between the joint venture and the valuation firms. Chinese law
enforcement recently instructed Grace to say that my business partner
provided false information and embezzled money. She refused to lie. She
entered a government building in Rugao on the morning of June 22 and
hasn’t been heard from since.
Rugao law enforcement also detained Frank Sterzer, our vice president of
manufacturing, for intimidation on June 29. Frank, a German citizen, was
released after six hours with no explanation for the detention after he
managed to contact the German Embassy using a cellphone the police
forgot to confiscate.
Though my colleagues refused to lie, the government has convinced one of
the three evaluation firms to do so. The Shanghai Wanlong Asset
Appraisal Co. issued a public statement denying it performed a valuation
report at all, and the government used that statement to declare the
reports were fabricated. The government has also levied bogus
embezzlement charges against my partners and me over money used to fund
vehicle development—payments the government knew about and approved
before they were made.
China’s aggressive theft of intellectual property is well documented. In
a 2019 survey of the CNBC Global CFO Council, 1 in 5 North American
corporations said China had stolen their intellectual property within
the past year. By one estimate this stealing costs the American economy
$600 billion annually.
China can no longer go unchecked. The U.S.-China trade deal must include
protections for American companies and consumers, who ultimately will
pay the price for Beijing’s theft. The Trump administration should have
the power to deny access to U.S. consumer and capital markets to foreign
entities found to be directly benefiting from the theft of American
intellectual property.
The U.S. should also deny thieves access to banking systems and require
the Securities and Exchange Commission to judge whether a company’s use
of stolen intellectual property is a material condition that should be
publicly reported. In addition to blocking such goods from the U.S.
market, Congress should pass legislation to block banks, investment
companies and other financial institutions and stock exchanges from
using asset valuation reports prepared by any Chinese asset valuation
firms. These reports are easily manipulated by the Chinese government.
Such measures may not be enough to protect my 40 years of work and the
brand I have built. But it isn’t too late for other American
entrepreneurs whose livelihoods are at stake. Congress, and the Trump
administration should send a clear message to China: If you want to be
in the race, play by the rules.
Mr. Saleen is a retired race car driver and founder of Saleen Inc.
--
So many immigrant groups have swept through our town
that Brooklyn, like Atlantis, reaches mythological
proportions in the mind of the world - RI Safir 1998
http://www.mrbrklyn.com
DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
http://www.nylxs.com - Leadership Development in Free Software
http://www.brooklyn-living.com
Being so tracked is for FARM ANIMALS and extermination camps,
but incompatible with living as a free human being. -RI Safir 2013
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