When U.S. firms buy or build manufacturing plants in China, China requires them to share their intellectual property and manufacturing know-how with Chinese state-owned enterprises, thereby enabling China to eventually design and build its own plants to take the business away from U.S. companies. That’s a clear violation of the rules of the World Trade Organization, but the U.S. does nothing to stop it. Cisco’s CEO sheepishly admitted that the practice of transferring technology is just part of doing business in China.
Meanwhile, China is starting to show off its new military power. Two Chinese jet fighters buzzed a U.S. plane within only 500 feet in the sky. And China did this just days before China’s President was to be received by Obama at the White House. And China is building and fortifying several islands in the South China Sea to serve as its “unsinkable aircraft carriers.”
Listen to the radio commentary here: