BRIDGE BRIEFING: Romney’s Hollow Tough Talk on China

Romney Opposed Steel And Tire Tariffs On China

Romney Opposed Bush Chinese Steel Tariffs And Obama’s Chinese Tire Tariffs. According to the Club for Growth, “In his recent book, Romney also voiced his opposition to President Bush’s steel tariff decision and President Obama’s decision to impose tariffs on foreign tires.” [Club For Growth, 2012 Presidential White Paper #5, 6/7/11]

Romney Wrote That The Bush Administration’s Attempt To Save U.S. Steel “Did More Harm Than Good.” In his book “No Apology” Mitt Romney wrote “The Bush administration’s decision to protect the U.S. steel industry is a case in point—I agree with those who have concluded that it did more harm than good.” [“No Apology,” 2011, Pg. 133]

Romney Wrote That President Obama’s Action To Defend Tire Companies From Foreign Competition Was “Bad For The Nation And Our Workers.” In his book “No Apology” Mitt Romney wrote “President Obama’s action to defend American tire companies from foreign competition may make good politics by repaying unions for their support of his campaign, but it is decidedly bad for the nation and our workers.” [“No Apology,” 2011, Pg. 133]

Obama Tire Tariffs Saved Jobs

Obama Imposed Tariffs On Chinese Tires Because The Market Disruption Cost 5000 American Jobs. According to the Washington Post, “In one of his first major decisions on trade policy, President Obama opted Friday to impose a tariff on tires from China, a move that fulfills his campaign promise to “crack down” on imports that unfairly undermine American workers but risks angering the nation’s second-largest trading partner. The decision is intended to bolster the ailing U.S. tire industry, in which more than 5,000 jobs have been lost over the past five years as the volume of Chinese tires in the market has tripled.” [Washington Post, 9/12/09]

The U.S. International Trade Commission Found That China Was Disrupting U.S. Tire Production. According to the USITC, “The U.S. International Trade Commission (ITC) today announced its determination in its China safeguard investigation involving certain passenger vehicle and light truck tires. The Commission made an affirmative determination, finding that certain passenger vehicle and light truck tires from China are being imported into the United States in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products. Chairman Shara L. Aranoff and Commissioners Charlotte R. Lane, Irving A. Williamson, and Dean A. Pinkert voted in the affirmative. Vice Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun voted in the negative.” [ITC, 6/18/09]

Denman Tire In Leavittsburg, Ohio Laid Off Employees As A Result Of Chinese Competition. According to the Business Journal Daily, “Denman Tire laid off 50 of its 300 employees in March. The company cited stiff competition from foreign competitors that have dumped tires, rubber and other products in the U.S. market, and Denman has found itself forced to purchase supplies form China.” [Business Journal Daily, 9/13/2006]

Denman Otsourced To China, Mexico and India. The Division of Trade Adjustment Assistance certified that workers at Denman Tire suffered job loss because of a shift in production to India and China in 2008. [TAA Decision 72818, 2/5/10]

The Federal Division Of Trade Adjustment Assistance Certified That Jobs At Cooper Tire In Findlay, Ohio Were Lost In 2008 As A Result Of Chinese Imports. According to the Division of Trade Adjustment Assistance, “The investigation revealed that the preponderance of declines in employment at the subject firm is related to a shift in production of light truck, SUV, and passenger tires to China. Furthermore, it is likely that imports of like or directly competitive articles will increase.” [TAA Decision 65889, 5/28/09]

The Federal Division Of Trade Adjustment Assistance Also Found That Cooper Tire Jobs Were Lost In Camden, NJ, Moraine, OH And Cedar Rapids, IA. In separate determinations, the Division of Trade Adjustment Assistance found that workers in Camden, NJ, Moraine, OH and Cedar Rapids, IA lost their jobs as a result of Chinese tire imports. [TAA Decision 72948, 4/26/10TAA Decision 71658, 8/27/09]

United Steel Workers: Tire Tariffs Led To The Creation Of At Least 595 Jobs, Including 100 New Workers At Cooper Tire In Findlay, Ohio. According to a press release from the USW, “‘There is no doubt that the relief authorized by the President has reversed the massive decline in domestic production,’ said USW International Vice President Tom Conway, who heads negotiations with Goodyear. ‘Goodyear plants producing 421 subject tires hired 130 new workers in 2010 and are working an average of 20 percent overtime. Cooper Tire in Texarkana, Ark., has 250 new hourly hires. The plant is running seven days a week and production is up around 20 percent,’ he said. The impact at Michelin plants manufacturing covered tires under BF Goodrich and Uniroyal brands is similar. Operations now run seven days a week; overtime is up to 15 percent, and 115 new production workers have been hired since the start of 2010. At Cooper Tire & Rubber in Findlay, Ohio, 100 new hourly employees have been hired since the relief went into effect; operations have returned to a seven-day work schedule; and production has increased 20 percent.” [PR Newswire, 9/1/10]

US Tariffs On Chinese Tires Were Upheld By The WTO After China Appealed. According to the Congressional Research Service, “In a report issued December 13, 2010, the WTO panel rejected all of China’s claims. Although other WTO members also invoked the China-specific safeguard, China had not challenged action taken by a WTO member under this provision before initiating its dispute with the United States and thus this was the first panel to review such a special safeguard action against Chinese goods.” [CRS, “Chinese Tire Imports: Section 421 Safeguards and the World Trade Organization (WTO)” 1/31/01]

Romney’s China Investments

Abbott Laboratories

Romney Used To Own Stock In Medical Equipment Company Abbot Laboratories, Which Does Business In Iran. According to BuzzFeed, “But until last May, Mitt Romney owned at least $6,000 of stock in a medical company, Abbott Laboratories, that does business in Iran, according to the candidate’s financial disclosures. … Abbott Laboratories, a health care company that manufactures medical equipment and pharmaceutical drugs, is one of about 4,000 American companies with permission from the U.S. government to bypass sanctions against Iran.” [BuzzFeed, 08/08/12]

The CEO Of Abbott Laboratories, Miles White, Is A Big Republican Donor Who Has Donated To The RNC, PACs And Romney’s Campaign. According to BuzzFeed, “[Abbott Laboratories’] CEO, Miles White, is also a big Republican donor who has donated nearly $50,000 to the RNC and PACs since last fall. He donated $2,500 to Romney’s campaign last June. Romney has been critical of Obama’s handling of Iran, pledging to adopt a tougher stance if he becomes president.” [BuzzFeed, 08/08/12]

Cnooc Ltd.

2006: Mitt And Ann Romney Had Up To $1 Million In A Fund Invested In China’s Oil Firm Cnooc Ltd. According to Mitt Romney’s personal financial disclosure for 2006, the Romneys had up to $1 million in a fund invested in Gazprom and Cnooc Ltd. Cnooc, the Chinese National Offshore Oil Corporation, signed a $16 billion deal with Iran in 2006. The fund, called “Horizon: Alpha +” has over a million of Ann Romney’s assets invested in it, and yielded Mrs. Romney up to $1 Million in 2006. [Wall Street Journal, 12/22/2006; Mitt Romney Personal Financial Disclosure 2006]

  • Cnooc Ltd. Paid Iran $16 Billion To Develop LNG Facilities And Gas Field. According to Forbes, State-owned China National Offshore Oil Corp. (Cnooc Ltd.), the country’s largest offshore oil producer, signed a deal with Iran to construct liquefied natural gas facilities and develop Iran’s huge North Pars gas field worth $16 Billion over 8 years. [Forbes Asia, 1/29/2007; Wall Street Journal, 12/22/06] 

In 2006, Romney Made $1 Million In Fund That Invested In Businesses With Ties To Chinese Oil. According to the Chicago Tribune, “Romney had up to $250,000 invested in the Russian state-owned GazProm, according to his personal financial disclosure for 2006. And in 2006, the Romneys made up to $1 million in a fund invested in Gazprom and the Chinese state oil firm, Cnooc Ltd. The Wall Street Journal noted that the fund, Horizon: Alpha + had more than $1 million of wife Ann Romney’s assets invested in it and yielded her up to $1 million in 2006. In August, India’s ambassador to Russia announced that Gazprom would participate in construction of a natural gas pipeline from Iran to Pakistan and India. In letters citing the risk that international sanctions might jeopardize their investments, a coalition of funds from New York, California, North Carolina and Illinois has cautioned energy companies working in Iran about investing there…The two-page letters were sent to the chief executives of Royal Dutch Shell, Total of France, Repsol of Spain, Eni of Italy and Gazprom of Russia, the New York Times reported earlier this year. The Bush administration has warned foreign energy companies and some foreign governments lately that they might incur penalties if they pursued deals in Iran. Given the recent tensions, several European companies have frozen plans to invest billions of dollars in several projects. Iran is the world’s second-largest holder of oil and natural gas reserves. American companies are barred from doing business there, the Times reported.” [Chicago Tribune, 9/19/07]

Sinopec

Romney Reported $100k In Chinese National Oil Company Sinopec That Did Business With Iran
Romney Made $15,000 On Chinese Oil Company That Had A Stake In An Oil Field In Iran. According to the Chicago Tribune, “Romney also made up to $15,000 in China Petroleum & Chemical (Sinopec) in 2006, according to his personal financial disclosure. Under an agreement between China and Iran in 2004, Sinopec had a 50 percent stake in developing the Yadavaran oil field in southwest Iran and was negotiating a long-term contract with National Iranian Oil Co, according to the International Oil Daily.” [Chicago Tribune, 9/19/07]

In 2006, Mitt Romney Personally Gained Up To $15,000 In Profit From China Petroleum & Chemical (Sinopec). According to Mitt Romney’s Financial Disclosure of 2006, Not only did Mitt Romney’s personal financial disclosure for 2006 reveal that he up to $100,000 worth of his personal assets invested in China National Petrochemical Corp. (Sinopec), but he also collected up to $15,000 for his investments in the state-owned Chinese oil giant in 2006, his disclosure shows. [Mitt Romney Personal Financial Disclosure 2006]

  • Sinopec Had Stake In Iranian Oil Field. According to the International Oil Daily, “Under an agreement signed between China and Iran in 2004, Chinese state Sinopec has exclusive rights to a 50% stake in developing Yadavaran and is negotiating a long-term contract with National Iranian Oil Co.” [International Oil Daily, 7/11/07]
  • Sinopec Oil Field Deal In Iran Worth $100 Billion. According to the Wall Street Journal, “Iran and China signed a memorandum of understanding in 2004 in which Iran would allow state-controlled [China Petrochemical Corp.], or Sinopec, to develop its Yadavaran oil field in southwest Iran. Iran is also pressing ahead with plans to deliver natural gas via a $6 billion pipeline to Pakistan and India.” According to the 2004 pact, China’s Sinopec would pay Iran at much as $100 Billion to develop the Yadavaran oil field in Iran and to secure up to 25 years of oil and gas supplies from Iran. [Wall Street Journal, 11/8/2006; International Herald Tribune, 11/27/06]

New Oriental Education & Technology Group

Romney Invested Between $15,000 And $50,000 In New Oriental Ed & Tech Group. According to personal financial disclosures, Mr. Romney Invested between $15,000 and $50,000 in New Oriental Ed & Tech Group through a blind trust. [Public Financial Disclosure Report, “Schedule A,” Office of Government of Ethics, Willard Mitt Romney, Filed 2011 pg. 15]

  • New Oriental Education & Technology Group Is “The Largest Provider Of Private Educational Services In China.” [Company website, accessed 10/26/11]
  • New Oriental Education & Technology Group Is Commonly Referred To As “New Oriental.” According to the company website, “As the largest provider of private educational services in China, New Oriental offers education for a lifetime, teaching skills that give students a crucial competitive advantage in the workplace and help improve their quality of life.” [Company website, accessed 10/26/11]

New Oriental Paid Application Ghostwriters

New Oriental Was One Of The Largest Players In The College Application Ghostwriting Business. According to The Chronicle Of Higher Education, “Ghostwritten applications are a more common phenomenon. Three of the biggest companies in the ghostwriting business, including the New Oriental School, rewrote about 1,000 applications this admissions season. The employees of one company that calls itself the China Educational Service Center say it provides ghostwriting services, although an administrator there says its main business is just to give advice on study abroad. ‘I honestly want to help students,’ he says.” [The Chronicle Of Higher Education, 1/5/01]

New Oriental Paid American Graduate Students To Write Personal Statements, Resumes And False Letters Of Recommendation For Chinese Students Applying To American Universities. According to The Chronicle Of Higher Education, “Every time Mr. Alexander rewrites an application for a Chinese student seeking admission to an American university, he gets 1,000 yuan, or $120. As an American graduate student at an Ivy League university, trying to survive on grant money here while doing research on his dissertation, he finds that money hard to turn down — even though he knows that what he is doing is wrong. In the past semester, Mr. Alexander, who doesn’t want his real name published, has rewritten 50 applications, netting $6,000. Mr. Alexander says many Chinese applicants to American graduate schools do not give him clear research interests, so he makes up topics for them. For about a third of his clients, he says, ‘I add a lot of stuff because they just don’t have any idea about anything.’ Mr. Alexander and about 20 other writers are paid by the New Oriental School, a private Chinese institution, which in turn charges students $500 to $1,000 — a substantial sum in China — to have their personal statements, resumes, and letters of recommendation doctored. New Oriental School administrators say they only provide polish, but other employees and students say the name of the game is rewriting. Indeed, with its no holds-barred approach to getting students placed abroad, the New Oriental School, which is most famous here for its test-preparation courses, seems to epitomize a countrywide pattern of practices that clash with Western educational values.” [The Chronicle Of Higher Education, 1/5/01]

Columbia Dean: Most Problems With Forgery Come From China, Hong Kong And Taiwan. According to The Chronicle Of Higher Education, “Admissions officers in the United States are on their guard against dishonest shortcuts. Jennifer Caplan, dean of graduate admissions at Columbia University, says that Columbia is especially cautious when evaluating international applicants but acknowledges that it has more problems with students from mainland China, Hong Kong, and Taiwan than elsewhere. Sometimes Chinese people even show up at Columbia with fake letters of admission and try to register. ‘Every year it happens with two or three people,’ marvels Ms. Caplan.” [The Chronicle Of Higher Education, 1/5/01]

New Oriental Message Boards Advertised For Paid Test Takers

New Oriental’s Message Board’s Contained Postings Searching For Paid Test Takers. According to The Chronicle Of Higher Education, “One taboo technique is to use a ‘qiangshou,’ or ‘gunner’ — someone who takes a test in place of someone else. Every day, several messages appear on the New Oriental School’s electronic bulletin board with titles like ‘searching for a male TOEFL gunner,’ referring to the Test of English as a Foreign Language. One recent message from a person identified only as ‘bs2002’ inquired about a ‘female GMAT expert’ and offered payment of $1,200 for a score above 750 — well above the average at the top American business schools. That elicited a response from someone outraged at the ‘loss of face’ that such a scheme could cause for China: ‘If you’re not even willing to put in the effort to prepare for the GMAT [Graduate Management Admission Test], it’s hard to imagine how you’ll be able to survive the two years of business school.’” [The Chronicle Of Higher Education, 1/5/01]

Test Piracy

New Oriental Pirated ETS Testing Materials To Distribute Sample Tests To Chinese Students. According to The Chronicle Of Higher Education, “Others are dubious about New Oriental’s contribution to students’ test scores. The most significant thing New Oriental does, says Tina Zhang, a student at Peking University, is distribute sample tests. For years New Oriental, like other Chinese test-preparation schools, has been pirating and selling Educational Testing Service publications — thus compromising their integrity and costing the testing service money by violating its copyrights. The testing service is now trying to clamp down.” [The Chronicle Of Higher Education, 1/5/01]

  • As Of 2001, 70% Of Mainland Chinese Students Who Attended American Universities Attended New Oriental’s Test-Preparation Classes. According to The Chronicle Of Higher Education, “The New Oriental School is the most successful company helping Chinese students enroll at American universities. The school has its headquarters in a small, white-tiled building in Beijing’s university district. Roughly 70 percent of mainland-Chinese students who attend American universities are graduates of New Oriental’s test-preparation classes.” [The Chronicle Of Higher Education, 1/5/01]
  • Pirated Testing Materials Included Stolen Tests And Memorized Questions. According to The Chronicle Of Higher Education, “Materials confiscated in 1996 and 1997 included non-public tests that could only have been stolen from examination rooms or memorized and written down later. Mr. Bao, the assistant director, denies that the school steals materials from examination centers.New Oriental teachers sometimes tell students that before 1996, the school did improperly obtain tests.” [T–he Chronicle Of Higher Education, 1/5/01]
  • New Oriental Was Raided For Piracy In 1996 And 1997. According to The Chronicle Of Higher Education, “Mr. Yu routinely brags to students that the Educational Testing Service has no problem with him, but in November, the American organization got Beijing-government authorities to seize unauthorized test materials from the school. Similar government raids hit New Oriental in 1996 and 1997, and each time, says Thomas Ewing, a testing-service spokesman, the company said it would not pirate materials anymore.” [The Chronicle Of Higher Education, 1/5/01]

ETS Suspicion Arose When They Saw A Surprising Increase In Chinese Test Scores. According to University Wire, “The initial suspicion began when ETS officials noticed a surprising increase in Chinese student test scores for the Graduate Record Examination from October 1999 to September 2000. William Paver, associate director of admissions for Graduate and International Students, said suspicion was natural considering the increase. ‘The ETS was wise to look deeper into the results,’ said Paver. ‘It’s as if a student made an 800 the first time he took the SAT and came back the next time with a 1300. It just wouldn’t add up.’ Paver noted that the ETS has had a long history of problems with the New Oriental School, saying that the service has confiscated materials from the organization as far back as 1996.” [University Wire, 2/9/01]

  • English Test Results For Chinese Students Were Drastically High Compared To Their Grasp Of English. According to The Chronicle Of Higher Education, “When Chinese students boast about high scores on graduate-school admissions tests, they often cite, with equal parts pride and shame, people who can score very high — 2200 or more out of a possible 2400 — on the Graduate Record Examination without necessarily being able to speak a proper English sentence. Some Chinese students get scores on the verbal section of the exam that are wildly out of proportion to their command of English, as measured by anything other than a multiple-choice test. How do they do it? Students say that if they spend enough time practicing on past exams and memorizing Mr. Yu’s book of Graduate Record Examination vocabulary, they eventually can ace the tests. Mr. Yu seems to have created a Chinese-style solution for beating the Graduate Record Examination that students in American test-preparation programs like Kaplan and the Princeton Review would probably be unwilling to use.” [The Chronicle Of Higher Education, 1/5/01]

In Response To New Oriental’s Piracy And Test Training Tactics, ETS Issued A Letter To American Universities Asking Them To Review And Scrutinize Chinese Applications Due To Compromised Test Scores. According to University Wire, “The world’s largest private educational testing and measurement organization is urging American universities to use caution when reviewing international application results of standardized tests administered to Chinese students. The Educational Testing Service issued a letter to international admission departments at schools such as the University of Texas asking review committees to scrutinize the applications of Chinese students due to fears of compromised test scores. Tom Ewing, a spokesman for ETS, said concerns have grown out of suspicions that one of China’s largest test preparation schools, the New Oriental School, had stolen and relayed unauthorized test information present on the examinations. These suspicions were verified after the ETS, working with a Chinese law enforcement agency, raided the New Oriental School’s headquarters in Beijing. ‘The New Oriental School has displayed a clearly concerted effort to remove test materials for use in their system,’ said Ewing. ‘These materials represent live and disclosed material, which they are illegally selling for a profit.’” [University Wire, 2/9/01]

Chinese Authorities Raided New Oriental And Found Illegal Copies Of Tests Being Sold. According to Associated Press Worldstream, “Tipped by a sharp improvement in test scores among Chinese students, ETS which administers and grades the tests enlisted Chinese authorities in its crackdown. Last November, they raided the school and seized thousands of illegal copies of the tests that were being sold logo and all _ in the bookstore of the New Oriental School. The raid yielded tests that included live questions currently being posed on ETS tests. The questions, ETS officials believe, were memorized by people who took the tests and later reproduced to be sold to students. ETS spokesman Tom Ewing said the school was caught selling bootlegged copies of the tests in 1996, 1997 and last December. Each time, the school apologized and said the practice would end, Ewing said. ‘They’re hollow promises now. We have no reason to believe that they will stop their illegal activities. We have to bring the power of the Chinese courts to bear on them,’ he said.” [Associated Press Worldstream, 2/21/01]

2001: ETS Sued New Oriental For Copyright Piracy. According to Associated Press Worldstream, “A U.S. company that administers college entrance tests is suing a Chinese school, accusing its operators of making copies of old exams and stealing questions. The Educational Testing Service, a nonprofit company that administers standardized tests in more than 181 countries, accuses the New Oriental School of Beijing and its headmaster, Michael Yu, of publishing pirated copies of old tests and selling them to students…In three suits filed last month in Beijing, ETS asked a Chinese court to order the New Oriental School to destroy illegal copies of the tests and publicly apologize for using them. ETS is seeking at least 1 million yuan (dlrs 120,800) in damages. It also wants the Chinese school permanently banned from using illegal copies of the Graduate Record Examination, the Graduate Management Admission Test and the Test of English as a Foreign Language.” [Associated Press Worldstream, 2/21/01;]

June 2002: New Oriental Admitted Piracy, But Argued They Only Sold Money On Commission. According to Chinaonline, “[11 June 2002] The First Intermediate People’s Court in Beijinghas adjourned the hearing into the lawsuit brought by ETS [Educational Testing Service] from the United States against the Beijing New Oriental School for copyright infringement. The 21 Shiji Jingji Baodao [21CN Business Herald] reported yesterday that the lawsuit with a claim of 30 million yuan [US$3.6 million] was filed a year ago. ETS has added a claim of 500,000 yuan [US$60,386.50] for the infringement of ETS’s trademark rights by Beijing New Oriental School. Beijing New Oriental School has admitted the infringement. However, Xu Xiaoping, vice president of Beijing New Oriental School, told a reporter for Shiji Jingji Baodao that the school’s infringement was of examination information related to ETS and had only been sold on commission and, thus, was not infringement.” [Chinaonline, 6/11/02]

ETS Argued It Should Receive A Percentage Of New Oriental’s Training Profit Because Its Materials And Curriculum Were Developed Using Pirated Materials. According to Chinaonline, “The second part was because the New Oriental School used large amounts of information infringing the copyright in its courses [such as TOEFL listening comprehension tapes], Dong said, and therefore ETS demanded compensation of 25 percent of training income of 60 million yuan [US$7.2 million], which would be 15 million yuan [US$1.8 million].” [Chinaonline, 6/11/02]

July 2002: Michael Yu, Founder Of New Oriental, Abruptly Resigns – Suspected It Was Because Of Testing Scandal. According to The Straits Times, “He is known as China’s ‘Master of overseas education’ because he has reputedly helped seven in 10 students who leave China to gain admission into foreign universities. But Mr Michael Yu, founder of China’s leading language school New Oriental, shocked the education world yesterday when it was revealed that he had quit his post as principal and chief executive to ‘live a quiet life overseas’ before deciding on his next move…When asked by The Straits Times why Mr Yu chose to leave just as the school was gaining national acclaim, the spokesman said: ‘He is giving way to new blood. There’s nothing controversial here.’ Not so to the local media, as his departure made the front page of the Beijing Morning Post. Its headline said he left ‘secretively’, but did not explain his motives. Controversy is nothing new to those familiar with New Oriental, such as when US-based Educational Testing Service (ETS) last year accused the school of stealing and relaying unauthorised test questions to its students. The ETS, the world’s largest private educational testing institute, later sent out letters to US universities urging caution in assessing the test results of Chinese applicants. Now in Canada and expected to return to Beijing next month, Mr Yu could not be reached for comment on whether such controversies had edged him out. If that is indeed the case, his resignation would signal a new chapter in China’s corporate history, as business leaders exercise accountability by leaving the scene.” [The Straits Times, 7/31/02]

  • September 2003: ETS Wins Copyright Lawsuit, And Is Awarded $1.21 Million. According to Business Daily Update, “A Beijing court on September 27 ruled against the Beijing-based New Oriental School in a copyright and trademark lawsuit brought by two American educational organizations, and ordered the Chinese school to pay some 10 million yuan (US $ 1.21 million) in compensation. As the developer and sponsor of the widely recognized ‘Test of English as a Foreign Language’ (TOEFL) and ‘Graduate Record Examination’ (GRE), two examinations that students from non English-speaking countries are required to take before applying to graduate schools in the United States, the New Jersey-based Educational Testing Service (ETS) has registered the copyright of TOEFL and GRE test questions with the American Copyright Bureau, and has registered ‘TOEFL’ and ‘GRE’ as trademarks in China. The Virginia-based Graduate Management Admission Council (GMAC), developer and sponsor of the ‘Graduate Management Admission Test’ (GMAT), has also done the same procedures.” [Business Daily Update, 9/28/03]
  • New Oriental Was Also Ordered To Pay $1. Million For Economic Losses And $123,000 In Legal Fees. According to Business Daily Update, “The New Oriental School was also ordered by the court to hand in all illegal copies of ETS and GMAC materials and to publish an apology to the two American institutions in the Chinese newspaper Legal Daily. In addition, New Oriental has to pay 8.9 million (US $ 1.1 million) and 410,000 yuan (US $ 49,580) to ETS and GMAC respectively for economic losses as well as shoulder the lawsuit fees of 1.016 million yuan (US $ 122,900). According to lawyers of the New Oriental School, the decision on whether to launch an appeal is subject to further consultation with the school” [Business Daily Update, 9/28/03]
  • The $1.21 Million Fine Represented A Small Portion Of What New Oriental Earned From Piracy. According to Xinhua General News Service, “A landmark court decision forcing the New Oriental Education Group to pay 10 million yuan (1.21 million US dollars) in compensation for copyright and trademark infringements against to two United States plaintiffs has caused controversy and debate in China. ‘The amount awarded to the two US firms is relatively high for copyright infringement cases in China, which are rarely won by foreign companies and if won, are awarded nominal compensation,’ the Agence France-Press (AFP) said. But, ‘the fine is not high at all,’ said Zhang Chu, an expert Intellectual Property Rights (IPR) law, in a telephone interview with Xinhua. ‘New Oriental has earned much more than the amount it was ordered to pay.’” [Xinhua General News Service, 10/1/03]

New Oriental Appealed Ruling. According to The Associated Press State & Local Wire, “A school that trains Chinese students for U.S. university entrance exams said Tuesday it would appeal a court order to pay $1.2 million to American testing companies that accused it of using stolen test questions. The New Oriental School is the most prominent part of a Chinese industry that helps tens of thousands of U.S.-bound students prepare for tests of academic and English language skills. A Beijing court ruled Saturday that it violated U.S. copyrights by selling copies of old tests and using agents to collect questions used on current tests.” [The Associated Press State & Local Wire, 9/30/03]

  • Appeal Upheld Verdict, But Reduced Fine To $774,000. According to The Chronicle Of Higher Education, “An appellate court in Beijing has reduced the penalty that the New Oriental Group, China’s leading test-preparation center, must pay to the Educational Testing Service and the Graduate Management Admission Council for infringement of intellectual-property rights, the state-run China Daily newspaper has reported. The two American organizations had accused New Oriental of selling pirated copes of copyrighted tests and of hiring people to sit for the examinations for the sole purpose of memorizing the questions, which the company then used as teaching materials in China. In September 2003, a lower court ordered the group to pay the two American organizations $1.2-million for copyright and trademark infringement. The company appealed that ruling. In a decision announced in December, the Beijing High People’s Court reduced the damages to $774,000, ruling that New Oriental had not infringed the trademarks for the Graduate Management Admission Test, the Graduate Record Examination, or the Test of English as a Foreign Language. The court said the Chinese company had used the terms GMAT, GRE, and Toefl on its publications only as the names of the tests, and not as business brands. Zhao Jing, a spokeswoman for New Oriental, said the company would pay the reduced damages. ‘This is the final decision of the court, and we will respect this ruling,’ she said.” [The Chronicle Of Higher Education, 1/14/05]

Pirated Textbooks Were Still Sold In Front Of New Oriental Schools Following Lawsuit. According to The Chronicle Of Higher Education, “‘Business is not bad,’ says a middle-aged woman in a brown coat one recent February afternoon. She stands on the sidewalk near a dusty street in Haidian, the university district of Beijing, showing a prospective buyer a list of books she has for sale. The woman, surnamed Wang, says that just the day before last, an educator came from the northern coastal province of Shandong and bought 500 books that contained questions for the Test of English as a Foreign Language. She leads a prospective buyer down the street, pauses for a second to open a manhole, pulls out a heavy plastic bag, and replaces the cover. The bag contains stacks of illegal CD-ROM’s with test questions from the Educational Testing Service. She then continues through a gate and into a residential complex, looking behind her shoulder every once in a while to check that the police aren’t following her. She continues through a weedy courtyard and opens the lock on a makeshift apartment about the size and with the feel of a tool shed. Inside the small room, she opens two cupboards that are full of pirated testing books with simple white covers printed with titles like ‘GRE 1994-2000.’ ‘Here, sit down and take a look,’ she says, pointing to a bed that takes up an entire side of the room. She spreads her pirated books, consisting of thin pages bound cheaply together, over the bed. Laid off from a job with a state-owned company, Ms. Wang says she now makes her livelihood by selling the books, which start around $5 each. By comparison, a legal version costs at least $20. She claims that the test questions are authentic ones from the Educational Testing Service. Dozens of illegal book vendors like Ms. Wang loiter on the sidewalk in front of New Oriental School. Several of the vendors say that they work for New Oriental, though the school vehemently denies such claims. ‘New Oriental ceased to distribute illegal copies of tests three years ago,’ says Xu Xiaoping, a spokesman and member of the school’s board of directors. Mr. von Mayrhauser of the Educational Testing Service says that the organization was unaware that the piracy was continuing.” [The Chronicle Of Higher Education, 4/2/04]

2007: ETS Licenses Materials To New Oriental. According to an ETS press release obtained via Market Wire, “Educational Testing Service (ETS), creator of the Test of English as a Foreign Language (TOEFL(R)), and New Oriental Education & Technology Group Inc. (NYSE: EDU), China’s largest private educational services provider, have reached an agreement making New Oriental the only language schools in China authorized by ETS to sell the TOEFL Practice Online (TPO) in their training classes. As part of the agreement, New Oriental has an exclusive right to provide TPO as a component of its language training or test preparation courses and may also sell the TPO to the general public through its bookstores. ETS will continue to sell the TPO on its website or through its subsidiaries or other third party resellers.” [Market Wire, 11/26/07]