John Berthelsen of the Asia Sentinel writes a thorough, and thoroughly alarming, piece about China’s investments in research and development compared to the U.S. R&D, and Chinese educational achievements versus American.

From “China’s Heavyweight R&D Spending“:

Hong Kong. Although previously China has publicly indicated its ambition to invest heavily in research and development, the amount to actually be devoted to the sector is staggering, and is expected to be distributed mostly by fiscal or government subsidy – actual cash payments.

Sean Darby, Asia strategist for Nomura international (HK) Ltd., estimated the amount of spending over the next five years in a report this week at 5 trillion yuan (US$758.4 billion), an even bigger amount than the mammoth – and successful – 4 trillion yuan stimulus package announced by the central government in 2008 as an attempt to minimize the impact of the global financial crisis.

Berthelsen’s analysis draws on a report on R&D by Research-Works, the leading independent equities research firm based in China, which has a summary and data points available here. He also cites Frank Vargo, the National Association of Manufacturers’ vice president for international economic affairs, who at a Shopfloor post detailed China’s violations of intellectual property rights and its government procurement mandates, “indigenous innovation.” (China’s ‘Innovation’ Policies Come at Expense of U.S. Manufacturers.)

Of China’s transgressions there’s no doubt. Still, as Research-Work’s managing director, Hugh Peyman writes:

China is no longer stuck in the Research and Copying, phase, as every other emerging leader went through, including the United States. Now China has real R&D and the products and processes that flow from it, something that has not yet registered with the popular mind, despite the mounting evidence.

This is the point at which we mention — for the first time this year at Shopfloor — that the R&D tax credit expires on Dec. 31, 2011.

The National Association of Manufacturers has joined a letter with leaders in the telecom and Internet industry to the Senate Commerce and House Energy and Commerce Committee chairmen and ranking members asking Congress to pass legislation affirming that all Internet Protocol (“IP”)-based services are, if regulated at all, regulated at the federal level for purposes of consistency and predictability(Copy of letter.)

The letter’s conclusion:

The continuing evolution of IP-based services will create a more competitive environment and will bring new and innovative services to consumers in all areas of the country. For this trend to continue, Congress must ensure that these inherently interstate services are regulated exclusively at the federal level, to the extent these services need to be regulated at all, and reject efforts to apply legacy state telecommunication regulation to the IP world. By doing so, Congress will encourage the continued development and deployment of new and innovative IP services as well as of the broadband platforms on which those services depend.

Other signers are AT&T, Google, Microsoft, TechAmerica, Telecommunications Industry Association, T-Mobile, Verizon and VON Coalition.

(Hat tip: Tech Daily Dose, National Journal)

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Amongst the many erudite thoughts to drip from the quill of Thomas Jefferson, only one has ever gotten me hot under the collar:

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

Well, that’s all fine and dandy if your estates keep you rolling in tobacco so you can crank out political philosophy all day (lifted, by the way, from the likes of Locke, Rousseau and Machiavelli), but if you’re the taper-maker, you’re going to be a little miffed if someone’s knocking off your products to the point that you’ve got to lay off your workers and people are suing you blind because fugazi tapers with your logos are burning down houses.

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This Monday, the White House signed into law the PRO-IP Act, which will go a long way in helping to curb the problem of counterfeit goods.  Unfortunately, what most folks who watch this area of the law see is a piece of legislation to loathe as much as they loathe the music industry, as something that might impede them from enjoying the media they want, regardless of whether they paid for it or not.  So whineth the pundits at Portfolio.com:

But how much will the new law, the PRO-IP Act, actually do to combat digital piracy? Is it the silver bullet the music business needs to save an industry that is shrinking by hundreds of millions of dollars per year? My answers: Not much, and no.

Nay, nay, dear heart: lift your angry eyes from your iPod and see that this legislation is much bigger than Britney.

This legislation isn’t to save the record industry; it’s to make sure the government is doing it’s job to protect consumers.  It’s to make sure that the replacement parts in your car are legit, and don’t end up causing horrific accidents.  It’s to make sure that the medications you take are legit, and don’t end up killing you.  Most importantly, it’s about saving American jobs (I put concern of country above my own personal well-being, but that’s just me).

Luckily, there are folks out there that get it.  Stephen Koff of the Cleveland Plain Dealer reminds us of the stakes:

Ohio companies including Gorman-Rupp Co., a Mansfield pump manufacturer, and Dana Corp., a Toledo maker of auto parts, could benefit if the bill stops foreign companies from stealing their engineering, packaging and sales literature.

So could Ford, Bendix and smaller companies such as Will-Burt Co. of Orville, whose sales of a lighting system in China declined from $1 million in 2001 to less than $250,000 in 2004 after a Chinese company that was supposed to market Will-Burt products there started selling Will-Burt knockoffs instead.

The bill, pushed by Ohio Republican Sen. George Voinovich for several years, grew out of complaints by businesses that found themselves competing with illegal, foreign-made products that looked just like their own — down to the UPC codes in some cases.

Well, we’re thankful for heroes like Sen. George Voinovich who are looking out for American manufacturers and workers, as well as Sens. Leahy, Specter and Bayh, who also were the original champions of the legislation.  They understand that it’s about protecting the small and medium businesses that keep our families employed and our economy going – despite the best efforts of mortgage speculators.

As for Mr. Jefferson?  Ironically enough, he was our first pirate hunter, going after the Barbary Pirates.*  So I guess he did know the value of property and commerce.

* Being a Trekkie geek from Boston, it titilates me to no end that he sent both the USS Constitution and the USS Enterprise to throw a Bean-Town beat-down on the Pasha of Tripoli.

The Senate Judiciary yesterday reported out two bills with implications for manufacturers and the economy at large, one good, one bad.

The good one is S. 3325, the Enforcement of Intellectual Property Rights Act. The bill creates an IP enforcement office within the Administration to develop a single joint strategy to fight counterfeiting and piracy. The bill also would allow Justice to bring civil actions to enforce copyright laws on behalf of private parties, of special interest to small and medium-sized manufacturers lacking the resources to pursue domestic and international counterfeiters.  

As our director of technology policy, Marc-Antony Signorino said:

NAM member companies understand and realize the damage that counterfeit and pirated products can impose on their businesses, their customers and our overall economic security. IP theft costs U.S. businesses $250 billion in lost revenue each year and has already cost the United States an estimated 750,000 jobs. In terms of health and safety, pirated products are vastly inferior to legitimate goods.  Commonly counterfeited items such automobile parts, airplane parts, food, medical devices, electrical supplies, and pharmaceuticals are making their way to consumers.

More from CNET News.  

The NAM’s full statement is in the extended entry below.

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