The Chinese like to copy technology or goods that someone else has invented. This is acceptable as long as they agree to pay whatever licensing and royalty fees are attached to that use. In many cases, they have paid royalties, especially to Qualcomm, whose wireless technology is at the core of most of the wireless services in China and most of the wireless devices made in China for domestic use or export.
In other cases, they have flouted the laws, as in the pirating of Windows software and illegal copying of DVDs. They say they are cracking down on illegal copying. Now it's time for them to prove it with regard to AMSC. Studying the recent AMSC announcement concerning the illegal sale of their trade secrets (confidential program code) by a person in Austria who was jailed for the act, it is going to be difficult for the Chinese to claim they invented this code themselves, especially if it matches or closely approximates the code that AMSC developed in house.
The discovery process, part of any legal action, can determine if the Chinese inserted some program code that just coincidentally happened to be like that taken from AMSC. Rather than admit wrongdoing and losing face, it is more likely that the Chinese will find a way to settle with AMSC, thereby leading to a further adjustment in earnings, probably for the better.
This is also an area where the U.S. government can exercise a little muscle. China wants better access to U.S. and world markets and treatment as a "market nation" rather than as a non-market nation whose product prices are sometimes set by government officials instead of the market place. Well, if they want it, they have to start acting like they deserve it.
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