China is making waves in the tech world. Every month, it seems, a new, groundbreaking technology emerges from the country. BYD, now the world's top electric vehicle maker, has just unveiled a rapid charger. This charger can juice up a car's battery with 250 miles of range in just five minutes. That's a game-changer for electric vehicles, making them more practical for everyday use. Meanwhile, DeepSeek, a leading AI company in China, has released an open-source model that's both powerful and affordable. These advancements are impressive, but there's a darker side to China's tech boom.

Some Chinese companies and policymakers are bending the rules. They're acting as if China is still a developing nation, needing special treatment. The issue? Standard-essential patents, or SEPs. These patents cover technologies that make different devices work together, like Wi-Fi and 5G. International rules say these patents should be licensed fairly, reasonably, and without discrimination. This way, everyone, from big companies to small startups, can use the latest tech.

But China has been lowering SEP licensing rates for its domestic companies. A 2023 court ruling in China slashed the licensing rate for Nokia's patents by over 61 percent compared to Western markets. The European Union has complained to the World Trade Organization about this. This isn't the first time China has done this. In 2017, Xiaomi got a 35 percent discount on SEP licensing fees for certain audio technologies. In 2015, Qualcomm had to offer a 35 percent discount on licensing fees for its technology in smartphones sold in China.

This preferential treatment has led many Chinese companies to underpay or not pay at all for patent licenses. They're waiting for legal challenges instead of seeking legitimate licenses. This is especially true in China's growing automotive industry. Modern cars use many features that rely on standardized patented technologies. Automakers in other countries pay fair rates for these technologies. But Chinese automakers are demanding discounts. They're even organizing a group boycott of securing licenses for SEPs.

This behavior is illegal under many countries' laws, including China's. But it's happening anyway. Most cars with 3G, 4G, or 5G technology that have been properly licensed weren't made in China. Chinese companies are using these technologies in their vehicles but aren't paying for them. It's like a group of highly paid bankers deciding to eat at a restaurant and not pay the bill.

This behavior hurts both Western firms and China's auto industry. While avoiding SEP licensing fees gives Chinese automakers a short-term cost advantage, it could lead to other countries blocking imports of Chinese vehicles. This would deny Chinese firms access to new markets. It also hinders economic growth worldwide. SEP owners need fair compensation to keep improving technologies and developing new ones. Just as Chinese companies expect to be paid fairly for their technology used outside China, they should pay fair rates for the technology they use in China.

China wants more respect on the world stage. But respect goes both ways. If China wants to shape the 21st century and steer the global economy, it needs to follow international norms. It's time to recommit to fair, reasonable, and non-discriminatory principles—and ensure every company pays its fair share in licensing fees for the technologies we all rely on.

INTERNATIONAL TRADE AGREEMENTS

China's Tech Race: Fair Play or Foul?

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