DISCUSSION China’s Patents

by Yolanda Villafuerte _______13th March 2013
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China has been admired by the West for many reasons: chopsticks, tea ceremonies, dragons, the Great Wall, benevolent ruling. But Chinese creativity? That has never really featured on the list.

In part this is due to language barriers and difficulty in accessing some of China’s more artsy offerings. Although K-pop and J-pop have been making inroads, Mando-pop – for all its bubble-gum pop appeal – has never really caught on in the West. China’s growing indie scene hasn’t even made it out of the country.  The same is true for art, with most people knowing something about Ming dynasty vases and perhaps something about Ai Weiwei, but little else.

There may be, however, some truth behind the accusation that China isn’t a particularly innovative or creative country. Most point to the Chinese education system as being indicative of this, with nothing that might be conceivably called creative thinking making it onto school curriculums. The rigorous Gaokao, the prerequisite for entrance into higher education institutions, is a good example of this. In order to pass students typically spending a year cramming, repeating past papers, and learning everything by rote. China generally produces excellent test-takers, but not so many free-thinkers.

It follows, then, that these excellent test-takers would go to work for equally un-innovative companies. There are a few outstanding private companies, such as internet start-ups AlibabaTencent  and Sina Weibo, who have all copied and adapted Western business models to the Chinese market. Some companies have also become known for their cheap technology, such as medical equipment manufacturer Mindray and telecoms giant Huawei. However there is still a general trend in privately-owned companies to rely on copying the technology of others – with a study in 2012 finding that 36.4 percent of companies surveyed had still not set up a research and development centre – and Chinese companies failed to make it onto Thomson Reuter’s list of top 100 innovators in both 2011 and 2012.

However China does realize that, as its workforce is no longer the cheapest, the shift from a ‘making’ economy to a ‘creating’ one has to be made, and that fostering innovation plays a key role in this. The current five-year plan calls for “indigenous innovation”, which the government has been trying to create by subsidising “strategic” industries and getting foreign firms to transfer intellectual property to Chinese national companies.

This strategy does seem on the surface to be working, as from 2008 to 2011 the number of patent applications grew by an average of more than 20% a year. Based on numbers released in December 2012, in 2011 China became the world’s top patent filer, surpassing the United States and Japan. It does, however, remain to be seen if these patents are as ‘valuable’ as others, as government incentives are given for all companies that file for patent application regardless of whether or not they are granted, and few sought to patent their ideas abroad. Yet the volume of patents filed, at face value, is still impressive.

Whether or not innovation can be created from the top-down remains to be seen, but there is a much clearer barrier standing in the way of the government’s plans: China’s patchy intellectual property (IP) laws. Some regions lack an adequate IP legal and enforcement structure, with companies not understanding what IP is, how to use it, and what they should be doing to protect it. 2011 also saw a huge rise in patent litigation, with 7,819 cases – twice as many as in the United States – filed. Most cases that made it to court were drawn-out and messy, and unlikely to result in monetary compensation, with the courts preferring to order companies to make public apologies instead.

Official prompts and subsidies notwithstanding, such precedents clearly speak volumes for how little innovation is actually valued in China.

Sarah Primmer is a research volunteer at Tomorrow’s Company. She is currently studying Chinese and History at SOAS.

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