China Research

According to the WIPO (World Intellectual Property Organization) – an agency of the United Nations – China was ranked in 2014 as the number three PCT (Patent Cooperation Treaty ) application country in the world, summing up its filing to totally 25 539. It should be added that the WIPO totally gathers nearly 190 member states. According to the WIPO’s website, the “PCT assists applicants in seeking patent protection internationally for their inventions … By filing one international patent application under the PCT, applicants can simultaneously seek protection for an invention in 148 countries throughout the world… “

This good Chinese ranking last year gave a global “market” share of almost 12%, after the U.S. (29%) and Japan (20%), and before Germany (somewhat above 8%). The Swedish share turned out to be relatively high (close to 2 %, 3925 applications, no 10 globally) – but 0.7% came alone from Ericsson; the total Swedish market share, however, has been declining somewhat compared to 2013. In the Chinese case, 1.6 % of all global PCT applications could be related to Huawei – the largest patent applier in the world – and 1% to ZTE (both representing the telecom and mobile business).

One may also note that other BRICS countries – if we still use this somewhat obsolete term – so far achieved very modest PCT-applications numbers compared to China’s 25 539 (India 1394, Russia 890, Brazil 581, South Africa 297; see also BOFIT Weekly 13/2015). China is indeed very ambitious when it comes to new technology and new products which I pointed at before a couple of times when discussing the strategic communiqué from the Third Plenum from November 2013 with its 16 chapters and 60 subchapters, many of them shadowing the New Growth Theory created by Paul Romer and consortes (who, by the way, would be a dignified Nobel Prize winner this year).

At the same time, however, one should not neglect that China’s PCT application numbers are misleading to some extent, even if it is hard to be more precise on what “to some extent” means in reality. We know that a substantial share of the Chinese applications do not stick to what can be called inventions in a real innovative sense. People I have been talking to have “guestimates” that only around one fourth or so of all Chinese PCT applications were justified from a strict innovative angle – but the same experts pointed also at the obvious fast upturn of genuine new Chinese patents and some slight general improvement of the enforcement of the Chinese patent law (see on this issue Ying Zhan, “Problems of Enforcement of Patent Law in China and its Ongoing Fourth Amendment”, Journal of Intellectual Property Rights, July 2014). In this context, Ying Zhan stresses the view that the Intellectual Property Right (IPR) system is a “Western imported system that takes more time to root in China”.

Altogether, there is no doubt that China is an increasingly important player on the global patent market – also what concerns the number and market share of technologically advanced innovations. But I would appreciate more transparency in this respect – and more and better research in this specific issue. Well-working patents are an important part of a promising innovation climate – and a promising and further improved innovation climate must be regarded as one of the decisive cornerstones of China’s new, future-oriented growth policy.

We should follow these trends that probably will affect us more than most of us imagine today.

Hubert Fromlet
Senior Professor of International Economics, Linnaeus University
Editorial board

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