“The rapid growth of Caxa shows that we are succeeding,” Yi said.
Hence the real reason that China is likely to start respecting intellectual property: China now has some skin in the game. More and more, it is not just Western companies with intellectual property to protect; Chinese companies like Caxa and Lenovo also need to have their intellectual property protected.
In addition, many Chinese companies talk about wanting to instill a culture of innovation, rather than slavishly copying the innovations of others. But innovation is impossible without intellectual property protection. After all, what’s the incentive to invent something new if your competitor can steal it with impunity?
I saw recently that Gucci won a big lawsuit — in China — against a Chinese company that was using its logo illegally. And Andrew Rothman, a China analyst with the investment firm CLSA, noted in a paper in September that “last year, China passed the US to become the world’s most litigious country in terms of intellectual property disputes.” Most of the lawsuits, he added, were brought by Chinese companies against other Chinese companies. I never thought I’d see the day when an uptick in litigation was a sign of progress, but there you go.
My last interview in China was with a teacher-turned-businessman named Michael Yu (俞敏紅). He is the founder and chief executive of New Oriental, a Kaplan-style company that he began in 1993 and has since become the largest private education company in China. In 2006, it went public, transforming Yu into a billionaire.
On the day I met him, he was wearing a flannel shirt, jeans and sneakers. At 45, he was the oldest chief executive I met in China.
The interview was one of the most enjoyable hours I spent in China. Yu, it turned out, had been through a lot to get to this point — he’d been run out of Beijing University after a public humiliation, had struggled to get a government license to start his first school and had had to slay many dragons along the way. His was hardly a get-rich-quick story, and Yu told it without an ounce of braggadocio.
“Michael built a business before he did an IPO,” said New Oriental’s chief financial officer, Louis Hsieh (謝東螢).
Though he professed to be a poor manager — “that’s why I hired these guys,” he laughed, pointing to Hsieh and another executive — Yu had the qualities you yearn to see in any company leader. He clearly cared deeply about his company and its mission.
“We didn’t just do this to get rich,” he said. “We are doing it to enrich other people’s life. The IPO is a dot on the road. You do not change your road because you have money or because you have an IPO.”
China has plenty of problems: Tibet, pollution, political repression, the Great Firewall, you name it. Even so, it is hard not to be optimistic when you meet someone like Yu. If he is the future of Chinese business, then that future is very bright.
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