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.

Pandoran Concerned About Protection of Indigenous Innovation

First off, this lawsuit threat is kind of a joke, so if you’re looking for a substantive post on China IPR issues, best to go elsewhere (just for today – please come back another time).

OK, now that all those serious-minded folk are gone, we can have some fun. Just for the record, though, here is the background on this issue:

An amateur Beijing writer alleges Avatar director James Cameron plagiarized his work and said he plans to file a lawsuit, seeking 1 billion yuan in compensation.

“Eighty percent of the plot and the key elements of the story are similar to my 1997 science fiction novel, Tale of the Blue Crows.

Zhou, said he spent more than seven years composing the 1.2-million-word novel, which recounts the epic journey of six astronauts to a distant planet, home to a race of blue skinned beings.

“I wrote in my novel that their space journey took them six years, but in Cameron’s movie, the journey takes them five years, nine months and 22 days,” said Zhou. “I was shocked when I first saw that. It is too close.”

If you’re already LOL, slow down. That was the real stuff. The manufactured laughs are still coming. Obviously that last bit about the length of time of the “space journey” (it can’t be a coincidence!) is a tip off that this guy’s perspective here is slightly skewed.

One last serious point. As a fiction writer and lover of the Sci-fi genre for well over 30 years, I am sympathetic. Every time you write something, it becomes yours in your mind, no matter how derivative it is. And with science fiction, a story about earthlings travelling to another planet to meet up with humanoids is hardly a new idea, even with the genetic manipulation/avatar tech in the movie, which is kind of cool. Not everyone can be an idea man like Dick or Sawyer.

Without further ado, The Daily Mash has a send up of this hapless would-be litigant. I’m just going to cut-and-paste excerpts, it’s hilarious with no comment needed.

Chinese novelist Zhou Shaomou has sensationally claimed that James Cameron’s Avatar has a plot.

Shaomou, whose name means ‘Michael Jackson lyric’ in Mandarin, is suing the director for £97m after stating that Avatar lifted several key story details from his novel Blue People Of The Allegory Mountains.

He said: “My reputation is in tatters now everybody knows I write stuff that could be turned into something like Avatar.

“I’m an absolute joke in the fantasy fiction community, which as you can imagine takes quite some doing.

“I spent seven years writing my 1.2 million word book, only for James Cameron to make a fortune out of it by trimming it to 18 hours, adding loads of brilliant explosions, marketing it really well, having an innate sense of populist tastes and… well… look, that’s not the point.

“Oh, and then there’s the 3D. Have you seen the 3D? Good lord.”

Shaomou claims he first noticed the similarities when the film passed the $1bn mark at the box office, adding: “I suddenly realised there was something very familiar about all that money.”

Entertainment law specialist, Nathan Muir, said: “Shamou doesn’t stand a chance. Any half-decent lawyer will be able to prove that the Avatar storyline is what happens when a maniac rolls around the New Age section of Waterstone’s covered in Blu Tac.”