China Trade Commission Now Offers Free IP Theft and Fraud Vulnerability Inspections For Beijing Business Community
A recent New York Times article confirms the real dangers of IP theft as well as a multitude of creative and costly employee scams and frauds that cost foreign companies millions every year.
- (1888PressRelease) November 10, 2011 - Today the CTC's Public Affairs Director, Paul Zhang announced that the CTC will be offering free IP theft vulnerability inspections and seminars until the end of the year to the Beijing business community. With a growing number of foreign companies quietly complaining about employees planted by competitors that they cannot fire, it is time to learn your options. Without learning China's Labor Laws you may find it next to impossible to fire "good employees" that have been collecting trade secrets, IP, or sales statistics for local Chinese competitors. China labor laws will protect his job so long as he/she is punctual and has a satisfactory performance evaluation from supervisors. In reality it may take you months to force his/her removal. If this happened inside your company, would YOU know what to do? Calling the police or your lawyer won't help at all since both will tell you this is an "internal HR matter!" Here is a just a sampling of what is becoming too common in China Today:
http://www.nytimes.com/2010/10/18/business/global/18espionage.html?_r=1&partner=rss&emc=rss
In a more brazen matter a foreign IT company working on new generation Cloud technology hired two bi-lingual IT interns and assigned them to identify and remove bugs in the Chinese version of their software. One of them, a 28 year-old honors student from Tianjin, who we shall call "Deng" (not his real name), was seen four months later driving a Porsche 911 and playing golf at Wanliu Golf Course in Beijing, where the annual membership fee is $100,000. When this was brought to the attention of the CEO, Deng was called in for a casual chat, and his new wealth was discussed.
Knowing Chinese labor law very well, Deng advised his CEO that he was not obligated to discuss his personal life and preferred not to. Three months later, a Chinese competitor hired Deng's sister and six months later that competitor introduced almost identical technology into the market using the same source code! This is not unlike what happened to Google whose source code was also stolen in China from hackers which Google will not admit were insiders.
Because Deng was a punctual and exemplary employee, with great performance reviews from superiors, who did not consent to polygraph examination, it was almost impossible to fire him. The company had no choice but to reassign him to an outside sales position which eventually compelled his resignation. But the damage was already done.
IP theft is not limited to the IT industry. In China in runs rampant in the chemical, plastics, and technologies industries as well. Prosecutions are few due to a legal system which is instructed to minimize such embarrassing matters from the ivory towers in Beijing. In fact, articles like this one will be censored from the internet in China.
But there is a silver dagger for every demon if you can first spot the spies. The CTC has been doing this successfully for over five years and can teach you how to use China's labor laws to your advantage. It is only a matter of tactical maneuvering that preempts fraudulent grievances and labor board complaints from the "good employee" who thinks he cannot be terminated.
The China Trade Commission offers discreet and confidential 1 day training to foreign HR Directors and CEOs as to how to spot and more importantly how to prevent this growing problem. If you have already been victimized the CTC can also show you how to minimize the bleeding with maximum damage control. The CTC also has several bi-lingual due diligence specialists to work undercover and conduct integrity control checks of suspected employees or with random corruption checks. With per capita incomes of only $5,000, many Chinese employees are quite open to accepting bribes for commercial favors and inside information.
Through covert infiltration, CTC investigators have caught 112 such employees in just the last six months on tape. As CTC Director Anthony DeMarco pointed out "Failing to conduct an integrity control inspection at least twicea year will almost certainly cost a foreign company in China at least a 5%-15% loss per year." For more information contact a due diligence specialist at the China Trade Commission at dds{at}ChinaTradeCommission.org. The best advice is the CTC's motto: "Be Sure - Not Sorry!"
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