Kal Raustiala and Christopher Sprigman explain how the Chinese concept of shanzhai, which refers to low-cost knockoffs, may work to the advantage of Western companies:
[L]ike so much else in China, the meaning of shanzhai is undergoing a drastic change. As The Wall Street Journal recently noted, “Once a term used to suggest something cheap or inferior, shanzhai now suggests to many a certain Chinese cleverness and ingenuity.” Indeed, Beijing seems to believe that shanzhai is something to cultivate. In 2009, an official from China’s National Copyright Administration declared that “shanzhai shows the cultural creativity of the common people.” He added, “It fits a market need and people like it.” There is a certain convenience to this realization, of course: Chinese authorities hope that the relative freedom to copy might help ease or at least mask the yawning economic divide in China.
Felix Salmon agrees that “Chinese piracy, far from being symptomatic of a deep-seated inability to innovate, is actually an economically vital form of innovation”:
Raustiala and Sprigman use the example of Xiaomi, a phone company which has sold some 7 million phones, for a total of more than $1.6 billion, since its launch less than two years ago. Xiaomi copies a lot of Apple’s innovations, but it also generates many of its own, and it iterates much faster than Apple does. Much the same can be said for Weibo, which started by copying Twitter but which at this point is arguably more advanced than the original.
Or look at the Chinese YouTube, Youku, which is displacing television in large part because it has no copyright verification. As Chinese media companies evolve to take advantage of Youku, they will be much better placed to compete in the 21st Century than US companies which rely on copyright laws to keep consumers boxed in to increasingly-unnatural modes of consumption. If you’re playing litigious defense, that might help your current cashflows — but it’s not going to help you win a generation which will increasingly neither know nor care what “live TV” means.
Recent Dish on the imitative tendencies of the Chinese here.
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