Dispatches from China

Indigenous innovation is a precious resource in China

In 2006, the state Council Leading Group on Science,  Technology and Education, chaired by Premier Wen Jiabao established a 2006-2020 National Plan for Science and Technology Development, which stressed increasing the number and quality of intellectual property (IP) registered in China.

The effort has two basic prongs: encourage the development and  registration of new IP developed in China by indigenous Chinese  people and encourage outside firms to develop and register IP in China.

Since then, China has offered tax breaks for research centers locating in China, reduced IP filing fees, offered free legal advice for those looking to register new IP, recruited research personnel and entrepreneurs and set up a government procurement preference program for indigenous IP.

Four years later, as China’s economy hums along  and the developed world sags, multinational corporations (MNCs) are feeling the heat. Their basic fear is that IP registered in China could be a heavy price to pay, if it is the price of access to China government procurement program. The idea being that if the IP is not protected, it could be used against the company not only in China but the rest of the world.

 On Nov. 15, 2009, the Chinese government issued Circular 618, requiring companies to register their indigenous products by Dec. 10. A firestorm of comments mostly by MNCs, Chambers of Commerce and Embassy Trade Departments followed. The result was a new comment period was established.

Read more in the latest Dispatches From China column.

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