Elgar Intellectual Property Law and Practice series
Edited by Stefan Luginbuehl and Peter Ganea
Chapter 1: CHINA’S PATENT POLICY
Since the 1970s, when Deng Xiao Ping opened up the country to foreign investment and limited private competition, and introduced the ‘socialist market reform’, China has – with an official annual GDP growth rate of nigh on 10 per cent – become the fastest-growing economy in human history. With its attractive labour conditions, including the low wages associated with its huge population, and more open policies for foreign direct investment, China has developed at a rapid rate into the country for labour-intensive low-technology manufacturing. At the beginning of the new millennium it was difficult to find a product which was not made in the People’s Republic of China. However, as the century progressed, the Chinese government came to recognise that sustainable growth could only continue at this pace – and China become a global player and the world’s biggest economy – if the country was transformed from a manufacturing economy to a manufacturing and knowledge-based economy. The establishment of a strong intellectual property system creating wealth for China and encouraging investment in research and development (R & D) was deemed to be an important part of this transformation. To this end, it was important to strengthen the independent innovation capacity of Chinese companies, to enable them to create and protect their own IP rights and free themselves from what was often considered the dominance of IP rights owned by foreign companies, who could set the conditions for the manufacture of their protected products and request licensing fees which left Chinese producers with little profit.