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Helen  Rong

J.D. Power & Associates

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Is it time for companies to establish global R&D centres in China? Is it time for "Designed in China, for global markets"?

While lots of companies say how much they are committed to the China market, there is still the US (or Europe) centric approach when it comes to product developments. The consumer market here offers a test ground for most advanced ideas for almost every industry. So is it time to start a new product from China, rather than throw a product to China to make people here swallow it? What's holding companies from shifting the R&D centre to China? Do we have ample talents from within China to drive global product innovations? Is IPR protection the main roadblock?

Topics: in China
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  • May 6 2011: Greetings Helen
    What’s a holding company from shifting the R&D canter to China?
    1. China must be seen as providing an economic or intellectual advantage to research and development groups.
    2. China is often perceived in the west as being led by two separate and sometimes corrupt governments, rightly or wrongly, the party and the military seem to act at odds with each other, neither having much control over the other. This leads to corruption and the occasional disappearance of people who disagree with government policy. Whatever Chinas decisions are regarding intellectual property rights they must be seen as monolithic and consistent foreign companies will not invest talent or money where they may be lost at a bureaucrat’s whim.
    Is IPR protection the main roadblock?
    1. Yes china must be seen as the world leader in the protection of IPR rights if it wishes to attract foreign research and development, this is the number one thing China can do to attract research and development. Companies are motivated almost solely by profit any research that’s coopted by a government or criminal organization is an unacceptable loss of profit.
    2. The secondary consideration is that any government regulation of a given field must be one stop shopping, bureaucrats and red tape are the eternal enemy of innovation. Government regulation and or interference must be kept to a minimum.
    So is it time to start a new product from China, rather than throw a product to China to make people here swallow it?
    1. China is more than innovative and capable of starting it’s owe new products the question is will the best minds in China stay in China or go somewhere with better IPR protections.
    2. It is important to note the western companies often develop products for western markets only, and for many companies China is a secondary market that is often an afterthought. This is not malicious it is in most cases a matter of economic necessity R&D develops what a free market demands first.

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