Is China’s intellectual property (IP) regime really all that bad? It has become generally accepted that the ongoing U.S.-China trade war is at least partially in response to Communist China’s practice of forcing technology transfers and its extremely poor protection of IP. But China’s IP regime is not as bad as the ongoing trade war narrative suggests. Instead, I see a paradox in China’s IP regime: while certainly risky in a number of ways, it is often less risky than many Western executives assume. Three myths about China’s IP regime hold back executives considering investments in the country – and the ability to see through these offers much needed nuance when strategizing for the Chinese market.
3 Myths About China’s IP Regime
Fears of forced technology transfer are overblown.
October 23, 2019, Updated October 24, 2019
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Summary.
China’s IP regime gets a bad rap. Three myths about China’s IP regime hold back executives considering investments in the country. The first is that state-sponsored “forced” technology transfer (FTT) in China is ubiquitous. The second is that China’s IP regime is categorically weaker and therefore less business-friendly than those of rich nations such as the US. And the third is that that because China is not a Western-style liberal democracy its governing institutions will never seriously respect IP. The debunking of these three myths illustrates that China’s IP regime may be much less risky than Western executives have often assumed. At the same time, IP infringement remains a significant problem in China and the country’s IP protection regime still has shortcomings. Western executives should join together to more constructively facilitate further reforms to China’s institutions