2011-01-09

Chinese Company Copying the Burj Khalifa

There's a relatively new article (Liz Goodwin, Yahoo! News) reporting on how Chinese land developers are looking to build a skyscraper that rips off of the design of Dubai's Burj Khalifa (formerly Burj Dubai). I've seen Chinese manufacturers use (without much modification) foreign competitors' designs before, but this takes it to a level I haven't seen before.
There are two questions I have upon seeing this: how much harm will such blatant copying really do, and what's the best way to prevent it from happening in the future?
Skyscrapers have become icons of cities and their countries. The Eiffel Tower stands for Paris and all of France, as does the Empire State Building for New York City and the US as well as (now) the Burj Khalifa for Dubai and the UAE. As far as I know, China has yet to build such an iconic skyscraper (though it has built plenty of skyscrapers in general in the recent past); maybe it's just me, but I can't associate any particular tall structure with China. So it seems to me a little questionable that the new (presumably) tallest structure in Beijing should be a copycat of another existing structure.
But how much economic harm does Chinese copying really do? Let's look at movies: though China has become [in]famous for rampant DVD piracy, the US movie industry's revenues and profits have increased year after year; even the MPAA admits as much. So clearly, that can't be an issue. Next, let's look at cars: at one point, Chinese automaker Chery sold a car called the QQ that was identical (without a manufacturing license) to GM's Chevrolet Matiz; not only did they look extraordinarily similar, but even large parts like doors were interchangeable. (GM threatened to sue Chery for patent infringement, and Chery responded by changing the design significantly a couple years later.) Yet, through it all, the Chevrolet Matiz continued to sell well in China regardless of Chery's actions. (This is also because, as far as I know, in China, domestic automakers only cater to the lower end of the market, while Chinese consumers prefer foreign cars higher up the spectrum. Thus, the Chevrolet Matiz had a higher perception of quality among consumers than the Chery QQ. Then again, I don't know how the two cars were priced relative to one another when this fiasco went on.) So here as well it's safe to say that copying didn't really negatively affect other companies (except for the money lost through the accompanying lawsuit(s)) or the Chinese car market on the whole. Now let's look at skyscrapers themselves: the article says that the Burj Khalifa suffered from construction issues (which negatively affected perceptions of visitors/tourists and potential lessees) and "by the autumn, a mere 8 percent of the Burj Khalifa's apartments were occupied, [while rents] had fallen by almost half." This all happened before Chinese developers planned to erect a copycat of that tower in Beijing. This of course remains to be seen, but I don't believe the Beijing tower will actually gain business at the expense of the Burj Khalifa, simply because there are other factors in play, chiefly factors relating to the surrounding city (e.g. business environment, laws, other businesses/attractions present, et cetera). They aren't just going to compete over the design and facilities over the towers themselves.
But given that this will likely become an icon of Beijing, it would be nicer if the tower was an original design. So what's going to stop such copying in the future? Well, recent articles in places like Slashdot and TechDirt show that Chinese companies and government entities are sourcing (and sometimes copying without licenses) foreign technologies to build their infrastructure and patenting the products along the way. This is to go along with the US's repeated demands to comply with IP laws. Yet, with these patents in place, the US can't compete, and China will continue such practices to their own benefit. It's clear that Chinese businesses only comply with international IP laws when it suits them (and flagrantly tramples over them otherwise). Unfortunately (or fortunately), I don't think anything is going to stop them now.