Implications for the Chinese Government

Many respondents in this study recognised that the central government in Beijing is strongly committed to enforcing IP rights effectively in China. It is crucial that the Chinese government is praised for this and encouraged to maintain this level of commitment to IP development in the future. However, although the central government may have the intention to fully comply with the TRIPS Agreement, there are issues of capacity that prevent full compliance. It must be borne in mind that many of the factors necessary for the operation of an effective IP system lie outside of the IP system itself: for example, “a consciousness of legal rights, respect for the rule of law, an effective and independent judiciary, a well-functioning innovation and competition system, basic infrastructure, established business practices and a critical mass of local stakeholders” (Yu 2016, p. 40). Consequently, there is a need to look beyond the IP system when considering the wider process of reform in China. Additionally, this broader perspective reflects the implication for trading partners that external pressure is unlikely to make a difference to the overall implementation and effectiveness of the IP system in the absence of progress in the other areas.

On the other hand, despite these issues of capacity which may not be easily resolved, there are minor changes that the government can make to improve the effectiveness of the current IP system. Two general issues which emerged from respondents’ comments on IP enforcement are a lack of consistency and a lack of transparency. Thus, the government could elude complaints about inconsistency by avoiding enforcing IP in “crackdown” campaigns, for example, annual enforcement campaigns which are renowned for taking place around the World

Consumer Rights Day held each year in March. With regard to transparency, although transparency of the relevant laws and regulations is now cited by respondents as much improved, transparency concerning enforcement actions is still subject to some criticism. Therefore, the government could further improve transparency by making available detailed enforcement statistics. This could also help in the fight against local protectionism; if local enforcement statistics show a markedly low level of fines, for example, there may be reason to suspect some low-level corruption in that area. Further, increased transparency around enforcement actions would also alleviate complaints from rights- holders that they are excluded from the enforcement process.

There are also a few minor substantive amendments that the government could consider making to the existing legislation. As discussed in Chap. 7, perhaps the most pressing of these would be improving the civil procedure rules and shifting the burden of proof to the respondent when calculating damages. Finally, the role of Chinese enterprises is key to sustaining improvements in the IP system in the future. For example, the current restrictive rules governing the formation and operation of NGOs in China could be relaxed to encourage Chinese enterprises to join together to cooperate on IP issues. This would also support the stated aim of developing innovation in contemporary China. At this juncture, it is undeniable that the Chinese government has recognised that the previous approach to economic development of relying on low-end manufacturing at the same time as attempting to develop an innovative high-tech sector is ultimately unsustainable. As the flood of recent news stories concerning inferior quality Chinese products shows,¹ the label “Made in China” is highly vulnerable to downgrading and consequently, efforts are increasingly being made to regulate compliance with quality regulations. The Chinese government appears to have realised that prioritising innovative enterprises over protecting imitative manufacturing enterprises is a better strategy for continued economic growth as seen through both official rhetoric as well as in substantive policies such as offering financial incentives for patent filings. It is clear that the stronger commitment from the central government in China has been a primary factor in driving forward the improvements which have been witnessed in the IP system over the past few years. It is to be hoped that not only does the central government maintain such levels of commitment but also that similar levels of commitment can spread to provincial and local levels of government as the benefits of stronger IP for economic development begin to be more widely experienced.