Visitors watch a robot performing a surgery during the 2018 National Mass Innovation and Entrepreneurship Week in Beijing on Oct. 9, 2018. (Photo: Xinhua)
China's integration into the international market during the 40-year-long opening up era introduced ideas that were previously unknown to most in the country. Somewhere along the way in adopting global trade practices, the significance of Intellectual Property Rights (IPR) was realized and China transformed into a major player.
The turning point was the membership of World Trade Organization (WTO) in 2001. Bound by a commitment to uphold the WTO's IPR rules, China refined its regulations and revamped its legal structure. The judiciary's dominant role was enhanced, leading to the establishment of 19 IPR specializing courts across the country.
China's achievements were last year recognized by World Intellectual Property Organization (WIPO) Director General citing a rapid rise in the use of the international patent system as an indication of the outward-looking approach of Chinese innovators as they enter new markets.
A press conference held by China National Intellectual Property Administration (CNIPA) this January highlighted a continuing rise in patent filings and trademark registrations that was seen as a sign that foreign and domestic IPR holders, despite ongoing tensions in global trade, have confidence in the protection offered in the Chinese market.
An aerial photo of Phase IV of the Yangshan Deep Water Port, an automated container terminal in Shanghai on July 25, 2018. (Photo: Xinhua)
To further improve business friendliness, the Chinese government currently is working on a new foreign investment law ready for the annual session of the National People's Congress next month. Details released so far of the draft show it is designed to address the need for fairness in any technology transfers by companies in a business partnership.
The Ministry of Commerce (MOC) is one of the Chinese government entities ensuring IPR protection. Last month, its spokesperson outlined an upcoming enhancement in various areas, such as legislation, the work of judicial organs and law enforcement.
It is already collaborating with the Standing Committee of the National People's Congress on early implementation of the new foreign investment law, aiming to make the climate for investment more stable, predictable and transparent.
Despite modernizing its implementation mechanism, China has faced undue criticism from certain circles. However, the myriad of benefits gained from a strong IPR regime is far too significant to be ignored.
Foremost is the development of an innovation-based economy. China is no longer the so-called "factory" for the inventions of other countries. With IP rights upheld and the corresponding monetary value guaranteed, innovative products and services of local companies are increasing.
The government's will to ensure IPR conventions are upheld can hardly be doubted since, in addition to encouraging more companies to rise to multinational prominence, it is prioritizing the transition of the economy to a knowledge-based one. Enterprises engaged in such activities regard intellectual property as a monetizable asset, where the continued uptake helps them achieve higher productivity gains.
Perhaps the most direct benefit of the enforcement is a confidence this instills in foreign investors. The popularity of the misnomer terming China the "workshop of the world" wouldn't have been possible if a satisfactory level of IPR wasn't already in effect.
To encourage investors, the State Council frequently reiterates its tough stance on infringements. A white paper released by the State Council Information Office last year termed IPR protection important for "cultivating a business environment that is law-based, internationalized and business-friendly."
During the latest biweekly consultation session of political advisers, a proposal to advance the IPR-related environment was quite practical in increasing people's overall awareness.
This can be done by adopting a number of cost-effective yet impactful ways. One is to introduce IPR as a university discipline so that the upcoming generation will be totally conversant with the concept and will work to stimulate research-backed progress.
With the startup phenomenon gaining ground, there are now college students who have become emerging entrepreneurs. This creates scope for greater IP awareness through campaigns at even lower educational levels to build a solid base of potential businesspeople.
In recent years, Chinese firms have become top international patent filers, while, on the domestic front, respect for IP rights is helping promote grassroots innovation. The short period of time China has taken to develop a sophisticated IP framework is precisely the reason its lead role in this domain is being anticipated in the next decade.
Daniel Hyatt is a Pakistan-based freelance journalist and commentator on modern China.