Before you ask your Chinese factory for a discount, make sure you won't be kidnapped and/or have your product cloned

A post called "The Right Way to Reduce Your China Product Costs" on China Law Blog (previously) sounds like pretty anodyne stuff, but it turns out to be a catalog of several technothrillers' worth of ultra-weird, real-world skullduggery and chicanery from the world of late-stage capitalism and trade war.

Background: Trump's tariffs have kneecapped Chinese manufacturing, and Chinese manufacturers are responding by slashing prices to their western customers. This has given rise to a wave of requests for discounts from those western companies, and Chinese manufacturers, already bleeding, are taking desperate steps to stay in business as customers leave or demand unrealistic discounts as a condition of staying.

The first one is plain old kidnapping (China Law Blog has written extensively about how kidnapping and ransom are a normal part of Chinese debt collection). Chinese manufacturers, working with local officials, have begun to kidnap representatives from western businesses, citing (possibly imaginary) debts or tax liabilities and holding those reps to ransom as a bargaining chip for keeping foreign business and/or extracting an exit payment from those that they lose.

Then there's product cloning: it's not merely that your Chinese manufacturer might steal your product dies and go into business cloning your product and selling it to your wholesalers (though that's happening!). It's also that your Chinese manufacturer might have taken out patents and trademarks on your business and its products. These don't just stop you from sourcing an alternative supplier after you part ways -- some western companies have found that their products are being seized at the Chinese border as counterfeits after anonymous businesses (presumed to be their former manufacturing partners) made patent and trademark claims with customs officials. Read the rest