econintersect .com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 29 March 2018

Why China Is A Leader In Intellectual Property And What The US Has To Do With It

from The Conversation

-- this post authored by Alice de Jonge, Monash University

United States President Donald Trump is not the first to complain about intellectual property (IP) theft by Chinese companies but ironically it was US companies' use of China's resources that led to the development of its powerhouse of patents.


Please share this article - Go to very top of page, right hand side, for social media buttons.


In the late 1980s and throughout the 1990s, western firms like Apple and Intel made large profits by investing in China to take advantage of the cheap labour, often at terrific human cost. As China's economy grew, and the population became wealthier, western firms were then able to profit by selling their products back to the wealthier children of the same labour force which made them.

The Chinese government saw this happening, and wanted western firms benefiting from the Chinese market to give something back. It established a system of approving foreign investments on the condition the businesses involved agreed to partner with local firms and transfer knowledge and skills to the local Chinese market.


Read more: Australia should steer clear of the sanction fight between the US and China


In December 2001 when China joined the WTO it entered into the Agreement on Trade-Related Intellectual Property Rights to bring its IP laws up to a minimum international level. At the same time, the government was keen to transition from being a manufacturing-based economy to an innovation-based economy. This large step forward (as opposed to great leap) would be fuelled by expanding China's domestically owned intellectual property.

One of China's more controversial growth tactics has been to focus on fostering IP innovation within China. For example, the government preferences procurement of high-technology products whose IP is owned or registered in China.

This has been called a strategic attempt to commercialise non-Chinese ideas in China, and as a trade barrier potentially contravening China's WTO commitments, including those under the Trade-Related Intellectual Property Rights agreement.

Former US President Barack Obama and Chinese President Xi Jinping during a press conference in Beijing, China in December 2014. AAP Image/ How Hwee Young EPA

In 2010 the Obama administration filed a complaint with the WTO over China's use of its innovation policies in the wind power industry. There's been other complaints lodged relating to Chinese IP laws, one notably in 2007 argued that China has failed to enforce IP law on pirated products, even when they had been identified by victims and/or the Chinese authorities.

Since the late 1990s, China has been steadily improving the quality of its IP protection and the standard of its IP law enforcement. Many of its preferential policies favouring Chinese IP development have been wound back so as not to discriminate against foreign IP; or at least not so obviously. Other amendments have strengthened IP protection and enforcement, as well as increasing penalties for IP infringements.

In March 2017, for example, the General Provisions of the Civil Law were amended to make clear that trade secrets can be protected under civil IP laws. Amendments to the 1993 Anti-Unfair Competition Law in early 2017 also improved protection for trade secrets.


Read more: China's quest for techno-military supremacy


China's most recent, 13th five-year plan, approved by the National People's Congress in early 2016, envisions China as a world leader in science, hi-tech and intelligent machines:

We will...expedite implementation of national science and technology programs... make breakthroughs in core technologies in fields including next generation information and communications, new energy, new materials, aeronautics, biomedicine and smart manufacturing...

Perhaps the best example of China's goal of becoming a global leader in artificial intelligence (AI) is in the area of facial recognition technology. These systems, which automatically identify an individual from a database of digital images, are now a part of everyday life in China in areas such as public security, financial services, transport and retail services.

This technology is also just one aspect of a broader system being rolled out by the Chinese authorities. It aims to monitor and influence the whole of Chinese society (individuals and organisations) through social credit ratings.

The global facial recognition industry is forecast to be worth US$6.5 billion by 2021, and its continued growth in China is being spurred by innovative start-ups like Yitu Technology and DeepGlint.

China knows that an essential part of achieving its aim of "science and intelligent technology leadership" is putting in place high quality legal protection for intellectual property. However, as recent reports from the United States have found, there remain many deficiencies in China's protection of trademarks, copyrights, and patents.

IP enforcement in the case of piracy and other breaches is often inadequate. Either there is no prosecution of breaches, no positive finding that a breach has occurred or the penalty applied is too light to have any deterrence value.

The ConversationHowever, for firms that do take the trouble to properly register their IP in China, protection does exist and enforcement is improving and will continue to improve.

Alice de Jonge, Senior Lecturer, International Law; Asian Business Law, Monash University

This article was originally published on The Conversation. Read the original article.

Click here for Historical Opinion Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Facebook Comment

Econintersect Opinion




advertisement - our newsletter sponsor

Biggest transfer of Wealth in US history has begun

A Maryland multimillionaire says the biggest legal transfer of wealth in American history has just gotten underway - here is the No. 1 step you must take

More details here...

[Click here to subscribe to our newsletter]








search_box
Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.







Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government























 navigate econintersect .com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2020 Econintersect LLC - all rights reserved