Yes, the competition against own technology transferred to China theme has been touched upon in a number of diaries and discussions since Globalisation catches up with rail industry?, also technology ownership rows (for example here), but 'the story is developing'.

Li Daokui has a point, in more than one way.

• China will sell its cheap knock-off products to customers who couldn't afford to buy the more expensive original. That's an expansion of the market. (A recent example: the CNR Datong locos for Belarus which are knock-offs of Alstom's PRIMA electric loco.)
  
• The original producers, however, can still aim for customers valuing reliability, quality and efficiency, especially given the fact that what they sold to China is not their latest technology. (This includes KHI, as I argued in China's premier line.)
  
• Customers who first bought Chinese products on the cheap may switch to Western producers later. Here an interesting example is Kazakhstan. In 2004 and 2010, CSR Zhuzhou supplied 27 express locomotives which were based on a Siemens type (this cooperation was more benign though: Siemens still got to supply parts rather than see them reverse-engineered). Then Alstom established a joint venture and built a factory in Kazakhstan (opened last December), which is delivering 95 express and 190 freight locomotives. In fact last year Alstom got to maintain and modernise the Chinese locos, too.

Specifically on the high-speed market, it's too early to bury Shinkansen export chances: neither CSR nor CNR sold any of its high-speed trains abroad. (As for Japan, the article quotes Hitachi's recent success in the UK to finally sign the contract for the Intercity Express Programme, although omitting to mention that these are just 200 km/h trains.)

Still, in the case of Shinkansen technology, the original developers' problem is not just the reverse-engineering of technology not covered by the transfer agreement, but the patenting of that technology. Japanese companies and even the government of Japan is bothered by this at least since June 2011.

A report in the China Daily last week suggests Chinese manufacturers are filing patent applications for high-speed rail products in various countries including the United States, Brazil, Russia, and Japan.

JR Central chairman Mr Yoshiomi Yamada has recently called on the Japanese government to take action if there is a violation of Japanese intellectual property rights.

_{*Lunatic*, n.
One whose delusions are out of fashion.}