You don’t see stuff like this every day:

It turns out that factory workers — not the activists labeled “preachy” by one expert, and not the Nike executives so wounded by criticism — get the last laugh. Villagers who “went out,” as Chinese say, for what critics described as dead-end manufacturing jobs are sending money back and returning with savings, building houses and starting businesses.

Workers who stitched shoes for Nike Inc. and apparel for Columbia Sportswear Co., both based near Beaverton, are fueling a wave of prosperity in rural China. The boom has a solid feel, with villagers paying cash for houses.

This flies directly in the face of the accepted wisdom of the U.S. media, which includes:

1. Foreign companies go to China because of low wages and/or poor environmental laws.
2. Foreign companies in China always adopt local standards, which include low wages and unsafe working conditions.
3. Foreign companies in China try to cover up information about their China factories because the facts are ugly.

Now, I’m the first to admit that those three statements are correct some of the time. Absolutely true. However, somewhere along the line, it became cool to write stories about these problems, which has led to a perception that this is descriptive of all foreign factories here. That of course is incorrect and highly misleading.

So when the article excerpted above, from the Portland Oregonian, takes such a different tack, it is worth notice. But why did the Oregonian dare to be different? Some sort of crusade for the truth?

Perhaps. I suspect, however, that Nike’s presence in Portland, and that company’s past PR problems with respect to China factory working conditions, motivated the piece. That being said, this is not a Nike apologia, and is in fact quite balanced:

Improved living standards don’t negate criticism by activists who castigated the outsourcing industry, especially Nike, a 1990s lightning rod for allegations of low pay and onerous working conditions. Abuses continue in some plants, especially those unconnected to international brands.

But longtime activists acknowledge that the sweatshop issue has lost steam, at least concerning China. Conditions and wages have improved, says Jeffrey Ballinger, a critic who still dismisses corporate-responsibility programs — in which Nike, Columbia and other companies set standards and inspect factories — as spin.

Kudos to the Oregonian for neither accepting conventional wisdom nor writing a puff piece on a local corporate giant.

It’s been all Google, all the time, at least in China IT/tech circles. With this week’s hearings in D.C. on the topic of Google and Net censorship, the media is in a bit of a frenzy at the moment.

As usual, the media reaction to a hot story like this includes: 1) beat the thing unmercifully until you’ve extracted every last drop of blood; and 2) try to tie the Google dispute in with as many other China stories as possible.

The problem is that there are a lot of things going on with respect to foreign companies in the China tech industry at the moment. Some of them are related or overlap, while others are wholly independent.

Case in point, a Businessweek article from Wednesday, whose headline suggests that it is a story about the foreign software industry’s travails in China. Indeed, this is what the article covers for the most part, starting off with a straightforward discussion of piracy rates (high, but lower than they used to be) and persistent problems:

That’s not good enough, says Robert Holleyman, president and CEO of the BSA. The Chinese, he contends, are not maintaining their momentum on getting PC users off of illegitimate software. “We’ve really stalled on this process,” he says in an interview from Washington. Although the BSA won’t have data on the 2009 Chinese piracy rate until May, Holleyman says, anecdotal evidence suggests “we are not making further progress.” In the past, Beijing has pledged that state enterprises would use proper software, he adds. “There is nothing that I have seen or heard that suggests that commitment has been met.”

The BSA has had a good run for a few years, with successes on the government procurement front in particular. But that was relatively low-hanging fruit. Trying to get SOEs nationwide to follow these rules is a tough job, and no one should be surprised that the promises on this are not being kept, or at least not yet.

So far, so good. This is where the article runs off the rails, though.

Holleyman went to Capitol Hill on Mar. 10 to spread the word about the software industry’s impatience with China. He was a featured speaker at a hearing on Beijing’s censorship of the Internet.

Come again? The BSA certainly has more on its plate than piracy, but seguing from copyright infringement to Net censorship in one paragraph like that makes me dizzy. The only common thread here seems to be the participation of Mr. Holleyman, the BSA chief.

So now the article is about Net censorship? No, unfortunately immediately after the paragraph describing who was speaking at the House hearing (shout out to Rebecca MacKinnon!), the subject heading of the next section was “Intellectual Property Transfer?” What that has to do with copyright piracy and/or Net censorship is beyond me.

Actually, IP transfer does concern the software industry, sort of, and the article next turned towards recent problems with indigenous innovation policy, which is leading some to call foul over local IP requirements for government procurement contracts. Again, important topic, but it has nothing to do with Net censorship.

I’m not trying to single out this article, or at least not much. It’s just that with so much in the news about Google, I think it’s become very attractive to throw the subject into anything you’re writing. This article is actually about what problems the software industry is facing in China. If the author had stuck to government procurement and IP, things would have been fine.

Import substitution industrialization (also called ISI) is a trade and economic policy based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. (Wiki)

During the past six months or so, one of the big themes in foreign investment circles has been the extent to which China has rolled up the red carpet for foreign companies. Some of this talk is in reaction to recent government enforcement policies that have made it more difficult for foreign companies to do business here. Additionally, China’s industrial policy has led to significant concentrations in certain market sectors, dominate by “chosen” State-owned Enterprises (SOEs).

In my own law practice, I have seen a disturbing trend with respect to technology transfer. In the past year, I have seen one tech license deal go bad because of a very questionable patent invalidation decision — the result allowed the local company to use the tech royalty-free. The other matter was a transfer of Chinese tech offshore, a purchase by a foreign entity; a couple of years ago, this deal would have gone through within days but now is bogged down in red tape.

For a long time, two of the chief motivating factors behind China domestic innovation programs are: self sufficiency and avoidance of paying royalties to foreign enterprises. As a developing country, China’s econ policy here makes some sense if it leads to domestic innovation and a continuous rise up the value chain of tech products.

However, if this attitude leads to specific policies designed to dislodge foreign suppliers in favor of domestic firms after tech know how has been shared, that’s not so cool. So what should we make of this sort of report:

China spends billions of dollars importing high-end scientific instruments every year, and its global competitiveness in manufacturing this technology is dwindling, a survey has found.

Conducted by Peking University and the National Center for Nanoscience and Technology and the National Science Library, the survey found that in some sectors scientists rely 100 percent on imported high-end instruments.

Importing these high-end instruments, including DNA sequencers and particle colliders, cost several billion US dollars in 2009, an increase of 30 percent on the previous year, the report found, without specifying an exact figure. (China Daily)

On its face, this is a simple report about how China is spending a lot of money, perhaps inefficiently. Maybe I’m reading between the lines too much here, but in addition to being more efficient, the obvious solution to this problem is import substitution.