Can't the companies just not do business in China if they don't like the contract? Other countries have similar laws, like it forces companies to hire local people or spend part of the money locally.

If China can afford to not respect the IP laws then there is nothing what a company can do, eventually the secrets would be reversed engineered.

They do. This is part of why we have such a large trade deficit with China.

The real issue here is China's double-talk on trade. They talk about open free trade but in reality they practice intense nationalistic and protectionist trade tactics. They do everything possible to prevent foreign companies from selling anything in China, while at the same time doing everything they can to attract foreign labor outsourcing, capital, and of course IP.

I can't blame them too much. These kinds of trade policies are how nations build strong domestic economies. The US did the same thing during its industrialization phase. Nevertheless it's horrible for American workers and the American middle class.

It's literally the only thing I agree with Trump about -- that China needs to be taken to task for its extremely aggressive trade policies.

Might makes right, and you can only take someone to task if you have the power to do so. The US (or at least owners of equity in the US) are too dependent on the cheap labor and lax environmental rules of China, otherwise there is no reason for the most powerful country in the world to let another country take "advantage" of them.

China is equally dependent on foreign infusions of capital. The real issue I think is that labor arbitrage has been very good for upper income and wealthy Americans. Corporations and the rich have gotten much richer by shipping labor off to China and paying less for it and pocketing the difference. That's largely why there has been no political will to challenge this situation.

I find it funny that it's also the previous generations' middle class' 401(k)s and pensions that need the investment returns provided by cheap chinese labor and lax environmental rules, while at the same time ruining the future for their descendants.

To me, the lack of political will to change has been akin to the local business owner being afraid to tell the local mafia boss he no longer needs protection.

Technology has stretched scarcity-based economics to the kind of breaking point where we complain when we get the iPhones and they get the sweatshops.

Have you considered maybe American companies simply aren't competitive enough compared to the local players. American products are often too expensive because the companies want high dollar profits to show their shareholders, even if the cost of production, which is often outsourced, doesn't justify the high market price.

Also, as time goes on the skills of the entire world population is being equalized. That is to say, the skilled labor market is becoming global. When that happens American workers and middle class simply can't keep enjoying the high wages that are currently prevalent.

Unless of course, you want to start a new era of imperialism and force developing economies to confine themselves to the lower end of the value chain.

You can. However 1 billion potential customers are dangerous to ignore. It isn't just that they don't buy from you, it is that they buy from your competition - which can include a brand new company they start locally - which gives your competition enough cash to design their next version better than yours.

Its not dangerous to ignore if it results in your entire IP portfolio getting expropriated and used to crush you.

Its a siren song that is enabled by increased quarterly profits, even knowing full well the risks, it will be another CEO and board before they come home to roost.

It is a double edge sword for sure.

That's so called exchange the technology by the market. If you are in the condition of China, what will you do to avoid yourself always stay in the lower level manufacture status? Imagine that's you as a human being, are you willing to always do the low pay labor work, or learning the knowledge and experience from your colleague secretly as they not willing to share with you, then try to position yourself a better career path?