The Plastics News China Blog is finally live!

From the previous posts, you can tell that we've been preparing for this blog for quite a while. The most notable feature of this blog lies in the bilingual, bicultural approach.

If you don't know this already, all the news content on the Plastics News China sites is written in English and then translated into Chinese. This publishing model has its limits in terms of the writing style and cultural background specific to the language. Idioms get lost in translation. For issues important to the different cultures, writers sometimes struggle with dissimilar, even conflicting, perspectives. Take Mattel's toy recalls as an example. Western readers were curious about the reality of outsourcing and manufacturing in China; while Chinese readers hoped to know how the incidents were going to affect China's international reputation and export business.

Therefore, I'm writing directly in Chinese for the Chinese version of the China blog, tapping into the country's culture, literature and business background. This English version of the China blog doesn't mirror the Chinese version. Rather, it picks up China-related topics that are of special interest to Western readers and offers analysis from the Western point of view. If you are bilingual, that's even better. You'll probably be able to catch both sides of one story.

Make yourself at home here, and do share your opinions using the comment feature.

Check back tomorrow for a post on an ongoing lawsuit between Battenfeld Extrusionstechnik and Hong Kong-based Cosmos Machinery Co. Ltd.

We all know that the enforcement of intellectual property protection in China is just not yet in place. You can see it everywhere in that country, from pirated DVDs found on most street corners to coffee shops with names that sound an awful lot like Starbucks, not to mention the large-scale "silk markets" selling top-grade counterfeit purses, watches and apparel in Shanghai and Beijing.

But to be fair, these "fake markets" have thrived largely on foreigners. The Shanghai Xiangyang market, which had US$60 million in annual sales before a crackdown in June 2006, claimed that 80 percent of its customers were Westerners.
Touring "fake markets" may be entertaining for the casual Western shopper, but the lack of IP protection really hurts when you are the one suffering infringement.

Battenfeld Extrusionstechnik GmbH in Bad Oeynhausen, Germany, is a recent victim in the news. It entered the Chinese market in 1996 by establishing joint venture subsidiary Battenfeld Chen Extrusion Systems Ltd. in Foshan, Guangdong province. Partner Chen Hsong was later phased out of the deal, and the company updated its name to Battenfeld Extrusion Systems Ltd. in 2006.

Battenfeld recently announced victory on an IP infringement case against three Guangdong subsidiaries of Hong Kong's Cosmos Machinery Co. Ltd. The case has come a long way from when Battenfeld filed it back in September 2003 at a local court in Foshan.

According to the verdict of the Dongguan Intermediate People's Court, dated November 8, 2007, the case was transferred from Foshan to Dongguan on November 30, 2004, and finally two hearings were held in April and June of 2007.

The copy of the verdict I'm referring to was supplied by Cosmos, who argued that Battenfeld's news release -- still available online at here -- contradicts the court ruling and is misleading.

The issue at point is how many of the defendants were judged guilty. Battenfeld's release pointed at all three Cosmos subsidiaries. Cosmos said only one was found guilty, and that was Donghua Cosmos Machinery Ltd. But the discrepancy is easy to solve. The court verdict clearly maintained that only the Donghua subsidiary infringed on Battenfeld's intellectual property by making single-screw extruder model P0450.

Cosmos also said it has appealed the judgment to the Guangdong High People's Court, so the case is not yet final. That's true. It might be a little early for Battenfeld to throw a party. But, even this preliminary success is encouraging to Western investors as well as Chinese companies that own patents, technologies and brands.

And who knows? Maybe Battenfeld will be able to supply more solid evidence and secure bigger success in the litigation. But this is all still up in the air, and it's pointless for me to speculate. What I can tell you, though, is that protecting your own products is no easy task.

The Dongguan court overruled some of Battenfeld's evidence, including testimonies from two of Battenfeld's Chinese mold suppliers. In written testimony, the moldmakers said Cosmos asked them for quotes for molds, and that Cosmos' drawings were almost identical to Battenfeld's molds.

The court also rejected photographic evidence that was taken at the 2007 Chinaplas show in Guangzhou. The court documents said, "Although it says 'Cosmos Machinery' and 'DEKUMA Welltec' in the photos, there's no way to verify whether these exhibitors are the defendants in this case. Also, the plaintiff can't prove this is relevant to the commercial secrets in dispute."

Battenfeld did request the court to collect evidence from Chinaplas organizers, including Adsale Exhibition Services Ltd., the China Foreign Trade Center, the National Light Industry Association and the Guangdong Plastic Processing Industry Association. But the court overruled the request based on Chinese laws, the same court document said.

So really, it becomes a heavy burden on the victim's shoulders to collect evidence that's acceptable by the local legal system. For multinational companies that operate in different countries, it's additionally challenging.

It's not easy even for Chinese local companies to defend their rights in their own country. Injection press giant Haitian commented on that in a speech at a Plastics News conference. In Haitian's headquarters city of Ningbo alone "there's another hundred companies that make machines the same as ours. Thirty of them use our logo to a certain extent," said Helmar Franz, Haitian International Holdings Ltd.'s executive director.

China also lacks an environment conducive to public opinion. Plastics News is the only publication in China that has reported Battenfeld's litigation with Cosmos. The state-owned media may fear pressure from the top, and private publications have been known to make compromises to keep their advertisers.

But if such information is not delivered to the public, violators of IP laws will never need to worry about their corporate reputation and branding. That's not fair to customers and the general public who deserve to be made aware of these happenings.

Stay tuned. With independent and unbiased principles, Plastics News will follow this case through.

For some reason, the Chinese government hasn't played tough on enforcing intellectual property protection. It makes you wonder how effective the recent ban on ultrathin plastic bags and free, thicker shopping bags will be. It seems like government officials need a reason to prioritize. For example, let's take a look at a recent issue in the media I've had experience with, but that's not related to plastic: bicycle theft.

A January 24 Reuters story said that police in China claim they have cut bicycle thefts by half over a nine-month period. The news story said that:

China has halved the number of bicycles stolen to about 2 million in the past nine months...following a campaign to clamp down on theft months before its capital hosts the Olympics.

The story continues,

To help battle the theft problem, the government introduced a system of identification numbers, and buyers must register their bikes using their real names as part of the effort to curb widespread theft.

In addition, an earlier story said the police also reward any tips that lead to an arrest of more than 15 bike pilferers and seizure of more than 50 stolen bikes.

Despite what the story says, the nine-month bike theft rate of 0.4 percent (2 million divided by 460 million) seems low to me. Bike thieves caused me constant headache during my college years in Beijing. I lost a total of eight bikes in four years. I was advised to buy cheap, used bikes (less than US$8) from special vendors to minimize loss caused by theft. (No, there's no comprehensive insurance for bikes.) And guess what? When I was shopping for my fourth bike, I actually found my first bike! Of course I had to pay to get it back. That's when I came to realize how the system worked.

Anyway, I'm glad someone is doing some sort of real crackdown now. It just shows that if the government wants something done, it can be done. Better late than never, I say.

Now, let's get back to plastics. What's the latest public reaction to the plastic bag ban? I gathered these interesting tidbits from various Chinese online media sources:

Plastics wholesalers have reported rising sales of ultrathin plastic bags to individuals. I guess these bags are being stocked up for family use, such as to contain garbage. Not sure whether and how the government will punish the use of ultrathin bags for non-commercial purposes.

Cashiers in supermarkets have reported that some customers have been asking for extra shopping bags. Get as many free bags as possible while they last! Stock up!

A gentleman in Beijing said he started using a cloth shopping bag, but supermarkets bagged his cloth bag with a plastic shopping bag. He thought it may be because of the advertising on the bags.

Vendors in farmer's markets told the press that they already de facto charge customers for plastic bags. "It's part of our cost. Plastics bags have never been free really." Of course, same thing with supermarkets and stores that list written prices.

A consumer reported that he was given a little extra vegetable when he declined to take plastic bags at a farmer's market.

China has officially opened its National Aquatics Center, nicknamed the "Water Cube" for its unique design.

The official Web site of the Beijing 2008 Olympic Games said it took over four years to complete the construction. According to the press release:

The NAC's Games-time construction area is close to 80,000 square meters, containing 17,000 standard seats, including 6,000 permanent seats and 11,000 temporary ones. During the 2008 Olympic Games, it will produce 42 gold medals in swimming, diving and synchronized swimming.
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On January 31, the NAC will host its first Good Luck Beijing sport event -- the 2008 Swimming China Open.

The iconic Olympics venue features a clear surface made out of ethylene tetrafluoroethylene (ETFE) plastic films. Officials said it's the first of its kind in China and the largest and most complicated membrane system in any single project in the world.

The Water Cube is also the only Olympic venue funded by $110 million in donations from ethnic Chinese living outside mainland China.

Plastics News has reported on the innovative use of plastic material in the Water Cube in a previous story Water Cube structure features ETFE foil membranes.

Photos courtesy of the Beijing Olympic Games official Web site.

Looking for a cool name for your business? The word of plastic is probably not on the top of your list, especially if the business has little to do with plastics, right?

But the owner of a hair salon in Beijing apparently has a special feeling for plastics. The salon is named The Plastics Center.

This article on China Daily described the salon workers as "unusual":

They have holes in their ears, rings in their noses, and they all wear shiny black silk suits and snow white kungfu shoes.

Oddly enough. What's more, the owner also has a different -- not sure it's extremely conservative or avant guard -- way of disciplining his staff.

The black suits were standing on the sidewalk, with their hands held tight behind. A man was giving a speech, in a manner that reminded me of a kungfu master trying to whip up his disciples' spirits.
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I heard a voice saying: "The First Group merits praise for good cleaning work. You gain a red flag. The Second Group, you must discipline yourself."
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And they also practice calisthenics.
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The music, all pop songs, was the same that I'd been hearing every day from the hair salon.
But the young people were doing calisthenics at least a decade old. Without any enthusiasm, their arms stretched toward passers-by, who screamed or laughed and hurried away.

You know, plastic has a very narrowly-defined meaning in Chinese. In the States, we use plastic to refer to credit cards and call orthopedic operations the plastic surgery. But the Chinese word of plastic simply means the polymer material. Next time I stop by Beijing, maybe I'll look for this salon and ask about the origin of the name.

As epic snowstorms continue to slam southern, central China, many Chinese have been stranded on their way home for the Chinese New Year, which falls on Feburary 7 this year.

Officially, the national holiday is seven days long, but most factories shut their doors for up to a month around the holiday, since it's the only time during the year when millions of migrant workers -- many traveling several days by train and bus -- can visit their families.

And because many plants are already closing for the holiday, I don't think the brutal blizzards should have too much direct impact on the plastics industry. A report from a Chinese plastics Web site confirmed my theory, sort of. In its forecast (viewable in Chinese at info.plas.hc360.com) on polyethylene pricing, the author says:

Almost all of the downstream processors have stopped production. Some trading businesses also have completed their annual plans and started vacation.

Although paralyzed transportation has caused a materials price hike on the seller's end, the report said, demand is staying low with little transaction being observed.

In the longer term, however, the industry will see impact. The Chinese government reported a direct loss of 22 billion yuan (more than US$3 billion) as of Jan 29. If the storms trigger higher inflation or a slowdown of the economy, the plastics industry will hurt as well. On a bright note, suppliers of plastic agricultural film and construction material might see a rise in demand.