How has intellectual property theft affected China's economy? What is the relationship between China's legal environment and intellectual property theft?
Answer: MNEs complain that the relentless, widespread, and sophisticated theft of their intellectual property fuels China's economic surge. Aggressive estimates attribute nearly a third of the Chinese economy to piracy. In the United States, the FBI estimates that American companies lose up to $250 billion annually to counterfeiting, half of it because of China's illegal practices. Most analysts point to the mix of China's quest to catch the west, collectivist orientation, rule-of-man legacy, and dubious enforcement of ambiguous laws. These conditions create an unprecedented political and legal morass. Officially, China has a battery of laws that comply with international standards for market access, nondiscrimination, and transparency. However, many Chinese citizens and officials naturally question the legitimacy of laws passed by foreign governments. Hence, foreign made laws are inconsistently enforced in the local marketplace. This gap between domestic traditions and foreign standards, explained a Chinese jurist, means that intellectual property laws exist to protect Chinese intellectual property from foreign intellectual property.