ArecentlyreleasedreportbytheWhiteHouseOfficeofTradeandManufacturingPolicy,blatantlyentitled“HowChina’sEconomicAggressionThreatenstheTechnologiesandIntellectualPropertyoftheUnitedStatesandtheWorld,”evenlistedvisitingChinesescholarsandstudents’utilizationofopenresourcesandparticipationinscientificmeetingsaspartoftheirtechnologicalespionage.Thisisridiculous,showingjusthowlameandbaselesstheiraccusationsagainstChinaare.ThereportbombasticallydenigratedChina’sintellectualpropertyrights(IPR)protection,purportingthatChinahasleveragedits“marketaccessapproval”and“governmentsupervision”toforcetechnologicaltransfers,beingtotallyblindtoChina’simprovinglegalsystemonIPRprotectionandtheincreasinglybetterbusinessenvironmentforforeigncompanies.It’stimetoequipbigotedChina-basherswithknowledgeaboutChina’slatestprogressontheIPRprotectionandgiveourreadersafullpictureontheissue.
AnEmergingIPPower
“Afterall,theChinesemarketgrowsmorecompellingbytheday,drawingmoreandmorecompaniesintothediscussion,andChinadoeschange.Whatistruetodaymaynotbetruetomorrow,”currentaffairscommentatorJackPerkowskiobservedinanarticleinForbes.WilliamWeightman,a2017-18FulbrightFellow,sharedthesamedevelopmentalperspectivewithPerkowskiinhisrecentarticle“China’sProgressonIntellectualPropertyRights(Yes,Really)”publishedbyTheDiplomat.WeightmanprobedthestereotypicalbiasaboutChina’sIPRprotectionasmanyU.Spaniesstillbuythestorythatastheworld’sfactoryChinachurnsoutlow-qualitymanu-facturedgoods,andimitatesproductsandbusinessmodelsfromabroadandthecountryisalandofcopycats“withnorespectforintellectualpropertyrights.”“This,ofcourse,isnotaccurate,”Weightmanpointedoutinthearticle.Heindicated,“ChinahasbecomeincreasinglyinnovativeandhasdemonstratedseriousresolvetoenforceaneffectiveIPRregime.”
Infact,foreignfirmsfarequitewellinprotectingtheirIPRs.A2016studybyBrianLovewithSantaClaraUniversitySchoolofLawshowedthatbetween2006and2011,foreigncompaniesbroughtover10percentofpatentinfringementcasesinChinaandwonover70percentofthosecases.Today,winratesareupto80percent.ThesealsoexplainwhyChinahasbeenfrequentlyselectedastheforumofchoicefornon-ChinesecompaniestolitigateIPdisputes.
AsmanyChinesecompaniesintendtoventuregloballyandhigh-techinnovation-centricactivitiesarebeinggreatlyencouragedandboomingathome,domesticdemandsforeffectiveIPprotectionarealsosoaring,whichhaspropelledtheimprovementofthecountry’sIPRprotectionlegalsystemandenforcement.
InhiskeynotespeechdeliveredattheopeningoftheBoaoForumforAsiaAnnualConference2018,PresidentXiJinpingpointedout,“StrongerIPRprotectionistherequirementofforeignenterprises,andevenmoresoofChineseenterprises.”XiindicatedthatChinawasreinstitutingtheStateIntellectualPropertyOfficetostrengthentheranksofitsofficers,stepuplawenforcement,significantlyraisethecostforoffenders,andfullyunlockthedeterrenteffectofrelevantlaws.
Accordingtothewhitepaper“ChinaandtheWorldTradeOrganization”releasedbytheStateCouncilInformationOffice,sinceitsaccessiontotheWTOin2001,ChinahasformulatedandimproveditslawsandregulationsonIPRprotection,setupIPRworkingmechanismswithmanycountries,andbuiltanIPRlegalsystemthatconformstoWTOrulesandsuitsthenationalconditionsofChina.Thewhitepaperlisted,“TheamendedTrademarkLawsetsupasystemofpunitivedamages.TheamendedAnti-UnfairCompetitionLawimprovestheprotectionoftradesecrets,identifiesactofconfusion,andexpandsandenhancesthescopeofIPprotectionthroughamyriadofadditions.CurrentlyChinaisworkingonamendingthePatentLawandtheCopyrightLaw.”ChinahassetupthreeIPRcourtsinBeijing,Shanghai,andGuangzhou,andspecialjudicialorgansat15intermediatecourtsacrossthecountrytohandlecrossregionalIPRcases,includingthoserelatedtopatents.
NotableresultshavebeenattainedbyChinainIPRprotection.Since2001,intellectualpropertyroyaltiespaidbyChinatoforeigncopyrightholdershaveregisteredanannualgrowthof17percent,reachingUS$28.6billionin2017.ThesameyearalsosawChinareceive1.382millioninventionpatentapplications,rankingfirstintheworldfortheseventhconsecutiveyear.AccordingtotheWorldIntellectualPropertyOrganization,51,000patentapplicationsfiledfromChinathroughthePatentCooperationTreatywereacceptedin2017,secondonlytotheU.S.
GeneraldirectoroftheStateIntellectualPropertyOfficeofChinaShenChangyudeclaredinaforuminAprilthatthecountry’srelentlesseffortstoimproveitsIPRprotectionhasliftedthepublicsatisfactionrateforChina’sIPRprotectiontothescoreof76in2017from63in2012.However,whilegoingglobal,manyChinesefirmshavesufferedIPRinfringementorbeenlimitedbyIPbarriersfromfaircompetition.Therefore,attheBoaoForumforAsia,PresidentXialsocalledonforeigngovernmentstoimproveprotectionofChineseIPR.
NoWinnersinaTradeWar
FindingsofboththeSection301oftheTradeActof1974investigationintoChina’spracticesintechnologytransfer,intellectualproperty,innovation,andtherecent-lyreleasedreportbytheWhiteHouseOfficeofTradeandManufacturingPolicycastigated“MadeinChina2025,”adomesticstrategyaimingtoupgradeChina’smanufacturing.Doesacountry’sdomesticdevelopmentplanneedtobesubjecttothescrutinyofaforeigngovernmentforapproval?Isthereanythingwrongwithacountrythatdesirestodevelopitseconomybyformulatingaplanandenrichingitspeople?It’sabrazeninterferenceinChina’sdomesticaffairsandbaselessaccusationsonChina’srightfulpractices.
However,behindthefacadeofunjustifiableinvestigationsandblatantignoranceoftheWTOmultilateraltradingsystem,wecanclearlydiscerntheTrumpadministration’sstrategicfearofChina.ConfinedbytheirzerosumgameandlingeringColdWarmentality,theycannotbeartoseearisingChinagaintheedgeonmanyfrontsofglobalindustrialdevelopment,andfailtoseethatwinwincooperationistheirwayout.TheUnitedStates,theestablishedpoweroftheworld,drivenbyhegemonism,istryingtobendanyonewhomightchallengeitsinternationallydominantpositionbyresortingtoprotectionismandisolationism.
However,economicglobalizationisanirreversibletrendandthemultilateraltradingsystemisvaluedbythemajorityoftheinternationalcommunity.Atradewarwilldonobodyanygood.“Therearenowinnersinatradewar,”WilliamZarit,chairmanoftheU.S.ChamberofCommerceinChina,saidinastatementpublishedrightbeforetheU.S.tariffstookeffect.
“Trump’ssoundestargumentinhiselectioncampaignwasthathewouldnotwasteAmericanlivesandtreasureinpointlesswarsofchoice,”AdamPosen,presidentofthePetersonInstituteforInternationalEconomics,saidinMarchinanop-edarticle.“Hislaunchingofatradewarwouldprove,however,tobehiseconomicAfghanistan—costly,open-ended,andfruitless.”
TheWashingtonPostandtheScharSchoolofPolicyandGovernmentatGeorgeMasonUniversityconductedapoll,tryingtolearnhowpeoplefeelaboutTrump’stariffsagainstChina,whichhastriggeredChina’sretaliatorytariffsonU.S.goods.Fifity-sixpercentofvotersthoughtthesituationwouldadverselyinfluenceU.S.jobs,and73percentofthemworriedaboutthetradewar’simpactonthem,i.e.therisingcostofliving.
AsalotofU.S.mediareportsnotedthatmanyfarmersandmanufacturerswhowereoncestaunchsupportersofTrump,areseeingtheirfaithfalterasthepunitivetariffstookeffectbecausetheyarealreadyfeelingtheimpactofreducedmarketaccessandhighercosts.