BIC ballpoint pen sellers in Africa have complained about Chinese counterfeits. When the points collapse, consumers think BIC made a defective product. Actually, the Chinese might have been doing their best. They just didn’t know how to make a good ballpoint pen.
Where are we going? To innovation.
How China Makes Ballpoint Pens
China produces 80% of the world’s ballpoint pens. So, it might seem odd that they just announced they figured out how to make a ballpoint pen.
The problem was the tip. Requiring high precision machinery and ultra-thin steel plates, the tip is the tough part. If all is done right, the ink flows smoothly for 800 meters. To get the best tips for their pen exports, Chinese manufacturers get them from Switzerland, Germany and Japan.
Now though China’s Premier Li Keqiang said that China should develop its own ballpoint pen technology. About much more than pens, his goal was to encourage independence and innovation.
But it’s complicated.
You have complacent ballpoint pen makers who are just fine. Happy to import the tips, they export close to 40 billion pens annually. Because China’s intellectual property protection is weak, they have no incentive to innovate. As for the pens with shoddy domestic tips, Chinese consumers buy them.
When Premier Li mandated progress, he told a state-owned stainless steel maker to do it. Now, after five years of R&D, they have said they have their prototypes. I guess that state-owned iron and steelmaker ballpoint tips will soon be in China’s pens.
Our Bottom Line: The Market and Command
You can see the difference between the market and command. In a market economy, secure intellectual property protection inspires innovation. When your inventions remain yours, so too do the profits.
With Chinese ballpoint pens, the government initiated the invention. Objecting to a foreign monopoly, they wanted industrial independence. They might get more than they bargained for as a steelmaker with a government monopoly upsets the status quo.
My sources and more: To learn the China ballpoint pen story, WSJ and the Washington Post were ideal complements. The first has the analysis and the second is good for detailed facts. With each new article adding to the picture, I kept reading from BloombergView , China Daily and Marketplace.org. My counterfeit facts primarily came from here.