Review of Intellectual Property Law Blog

The China IP Blog Series: China IP 2020-2021, the Past, Present, and Future

By Staff on Friday, January 22nd, 2021
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Author: Dr. Paolo Beconcini (Head of the IP and Anti-Counterfeiting Team – China & APAC – at Squire Patton Boggs)

The protection of intellectual property rights is a constant grievance in the trade disputes between China and the United States. As recently as 2018, China’s IP system’s alleged flaws were the immediate and formal cause for the escalation of the US trade sanctions that started the trade war with China.[1] China’s allegedly slow and halfhearted reform of its IP protection system has been indeed a consistent obstacle in the relations between China, the US, and other developed countries including in particular, the EU, Japan, and Australia. China has often been accused of turning a blind eye to the flawed enforcement of its local administrative and judicial apparatus, as well as tolerating, when not actively supporting the theft of foreign IP rights, thus fueling Chinese innovation at the expense of foreign know-how.[2] The US, in particular, has often resorted to threats of trade sanctions to force China to implement changes to its IP system. Such requests were motivated by the US perception of what was fair and acceptable and measured the results based on its own understanding of the law and the world order. On the Chinese side, this has triggered resistance and resentment. Legal reforms imposed by foreigners, irrespective of China’s policies and stage of development, both economic and administrative, resulted in flawed implematation of their written enactments, keeping the circle of grievence and halfhearted repsonses endless.  

Foreign businesses have had their fair share of challenges when securing their IP in China. This largely stems from a lack of trust in China’s IP laws and lackluster enforcement. To a certain extent, the litany of grievances and complaints by western governments about China’s IP have narrowed the mindset of their entrepreneurs when dealing with China. This has led to terrible experiences that were often compelled more by ignorance or prejudice than by a real malfunction of the Chinese IP system. In all these years, China has steadily improved its IP laws and regulations to meet its international commitments and  its ever-changing economic, financial, and political landscape both internally and globally. Even the much complained about enforcement system has improved. Today it is possible to successfully enforce trademarks, patents, and copyrights in China. Enforcement agencies are generally eager to tackle counterfeiting and IP theft. It would be a mistake to believe that the Chinese legal system is entirely unreliable. China has evolved; its society and business infrastructure have evolved, catching up with the need for better IP protection on par with any western country. Regional gaps and problems still remain, but they are more confined and less widespread than they used to be.

Instead, the IP related tensions between China and the US are moving up the ladder. China has set it sites not only on reshaping its IP system, but on becoming a leading innovator. That is why most complaints about the Chinese IP system no longer concern the trademark law or the issue of “copyright as patent protection.” This is especially the case in the field of pharmaceutical innovation, which has forced IP transfers or disclosures by government officials in charge of approving investments.

The new challenges foreign rights holders, practitioners, and policymakers encounter when dealing with China are rapidly and consistently changing. Chinese economic policies make the understanding of the Chinese IP system and the underlying factors that affect further development a key factor for business success. Subsequently, the US-China relation is the most important bilateral relationship in the world. Understanding where China is heading and how its innovation and IP policies will be handled will help find common ground that will hopefully allow rearrangements of the world order in a peaceful and beneficial manner.

This is why now, more than ever, it is essential to deepen the knowledge of China’s legal system in order to avoid stereotyping and to improve policies and business strategies that are pragmatic and realistic. It is time to build bridges and lay the foundation for a peaceful and prosperous future for the generations to come.  

A Look Back to 2020

In 2020, China was very active in producing a number of significant legislative, regulatory, and judicial changes to its IP system. The many manifestations of China’s commitment to further develop its IP protection system includes its latest amendments to its patent law, new regulations on pharmaceutical patents, new rules regarding trademark protection from squatters, new rules on evidence in IP cases, new court interpretations aiming at solving some critical issues with trade secret protection in China, and further regulations on abuse of IP rights and on IP crimes.

However, two questions are worth exploring in depth: what are the forces that propelled the modernization process in China over the last three years and what lead to 2020 being the culmination point of that process? Was it the pressure exercised by the US over China with trade sanctions and tariffs? Was it Covid-19 and the acceleration of the relocation of foreign supply chain away from China? Was it a change that has always been in the making in light of China’s political agenda and new leadership of the secretary-general of the Communist Party of China (CPC), Mr. Xi Jinping?

The answer is obviously all of them. More problematic, even of most critical consequence, would be to apportion the effect of each of these factors on the current state of China’s IP system. Although this may be difficult to assess due to the intermingling of each factor with the others, a review of their historical development can provide useful hindsight as to their role and influence on China’s choices regarding its IP system. Such a review will help create an understanding of the cultural differences which will allow for a more objective observation and interpretation of China’s actions. This will help us better figure out the direction these reforms are headed and their real and practical impact on foreign rights holders.

External Pressure

An important factor in China’s IP development is pressure from foreign and external forces to modernize its laws. That being said, its efficacy has varied with the different phases of China’s economic development. Generally speaking, we can safely state that external pressure has positively affected the adoption of newly written statutes and regulations. Its success is less palpable, and surely not consistent, when it comes to how such laws have been interpreted and applied. An overview of how external pressure on China, especially from the US, has impacted China’s restructuring of its IP regime will be useful to highlight the above findings.

1979 to 2000

Since the reform and opening up of China under Deng Xiao Ping and the new collective leadership of the CPC, the US has been pressuring China into reforming its intellectual property system. The US efforts started in 1979 with the first US-China Trade Agreement where China committed to introducing a modern IP system in order to attract and protect foreign investors. Ten years later, China had fallen back on US expectations and had been listed for the first time on the priority watch list for the US Trade Representative under the famous Section 301 of the 1974 Trade Act.[3] From then on, the relation followed the same cyclical pattern: a new agreement and China’s renewed commitment to improving its IP protection system followed by US disillusionment accompanied by more threats of sanctions, which in turn triggered Chinese retaliatory threats, which would result in the parties backing down and signing a new agreement.[4] In between these agreements, China kept implementing key amendments to its IP system, and began joining key international treaties and conventions.[5]

This was the phase where China realized the need for a western type of IP system to attract foreign investments. The pressure of the US was quite effective in forcing China to speed up the modernization and ‘westerinization’ of its laws. At the same time, the lack of maturity of the Chinese system could not keep up with the intensity of the change the US demanded. In this phase, heavy lobbying work by the US government and the US entertainment industry forced China to start tackling piracy. At the same time, China did not fully respond to all the demands. Due to internal economic and political issues, the state of its administrative apparatus would not allow a full and immediate reception of all the demanded changes. As we shall see in the following sections of this blog, the efficacy of the external pressure was strongly diminished by China’s local factors.

2001 to 2017

China’s accession to the WTO and the ratification of the related IP agreements, like the TRIPS agreement, increased pressure on China to further modernize its IP laws. Therefore, it is safe to surmise that China’s pace of innovation increased in quantity and quality during this period where China was driven by a will to further integrate its economy at a global level. It was in the first decade of the twenty-first century that China really introduced more modern versions of its trademark, copyright, and patent laws and regulations. Patent and trademark examination guidelines were implemented and amended in these years in order to provide reliable guidance to examiners and to overcome more sophisticated technical challenges. The Supreme People’s Court initiated a tradition of “legislative” intervention in the IP field with the increasing issuance of binding interpretations of the IP laws. Such intervention has become the most important vehicle for the adaptation and continued development of written statutes and regulations to meet a fast-changing economic and technological situation.

During this seventeen year period, the development of the Chinese market economy accelerated. External intervention was not able to influence the implementation of these new modern laws and regulations in a significant manner. Conflicting interests at the local level, uneven local development, local protectionism, inadequate and corrupted administrative apparatus, and inexperienced judges (with few exceptions) created a hiatus between what was decided and legislated in Beijing and what was happening at field level. Despite the US protests and threats, the gap between the adoption of more modern written laws and their flawed enforcement kept growing. It was also in this period that the US and other developed countries started accusing China not only of passively tolerating IP infringements, but willingly accepting it as a way of winning free foreign know-how for the growth of its own industries.

2018 to Present

The frayed relations between China and the US heated up again and came to a head in 2018 with the US’s imposition of trade sanctions, filing of WTO complaints, and launching of Section 301 investigations against China, where China’s allegedly flawed IP status was one of the main sources of grievances.

Unlike before, this time the US imposed trade sanctions against China via Section 301 and the WTO rules, triggering China’s trade retaliation; escalating the dispute into a trade war. This time China felt it had been unfairly targeted, especially regarding the assessments on its IP system contained in the US Trade Representative’s Section 301 investigation. From its standpoint, China believed it had demonstrated commitment and progress to the reform and modernization of its IP system. The US accusations and the sanctions were perceived as a pretext for other not so hidden domestic purposes and to force some trade realignment between China and the US by use of “force.” The trade dispute ceased in January 2020 when the parties reached a new economic and trade agreement. This agreement contains a number of important IP provisions in its very first chapter. It is one of the objectives of this blog to address whenever possible the situation of the agreement’s implementation. For the purpose of this introduction, it suffices to say that a rather large portion of the commitments taken by China regarding the improvement of its IP system, were already implemented by legislation, regulations, or court interpretations in China long before the agreement itself and some even before the onset of the trade war.

In conclusion, US pressure over the years has had some effect on China. Such effect was very strong at the very beginning of China’s path to modernization. US pressure ushered China into the international IP community. However, US frustration and shallow trade sanction threats seemed to invite the Chinese to give the appearance of cooperation all while sticking to their own agenda. This only increased US frustration all while obfuscating any meaningful advancement on the Chinese side. Even the recent trade war escalation does not seem to have produced a comparable response from China. Many issues addressed in the 2020 trade agreement were no longer disputed because China had taken prior reform initiatives (see for instance the 2019 amendment of the outdated unfair competition law). This is further evinced by the fact that the flurry of IP reforms initiated in 2020 find roots in previously planned amendments, are rooted to other domestic reasons and initiatives, or were accelerated by external factors different from US trade pressure. Let’s have a look at these other factors.     

China’s Path to Modernization

There is no doubt that reform of the IP system in China has been heavily influenced by the country’s policies and the CPC political and economic agenda over the course of its recent history. From the inception of the People’s Republic in 1949, to the death of Mao Zedong, and through to the rise of Deng Xiao Ping to power, the prior legal system had been abolished and re-curated because it was seen as a restraint on the absolute power of the CPC and of its leader Mao Zedong. Specifically, and for example, strict or westernized intellectual property policy conflicted with the economic ideals and collectivization policies of the time, explaining the previous absence or lack of protection of intellectual works in whatever form.

Reform and Opening Up

At the beginning of the 1980s Deng Xiaoping and the CPC, in order to remedy the aberrations of the Maoist system with its incessant and destabilizing campaigns, and to prevent unrestrained power of the party, reintroduced the rule of law in China. In 1982 a new Constitution was adopted, which still stands today, although in a heavily amended form. Deng and the party saw the launch of a reform of the country’s administrative and legal system and an opening of China to the world as the only hope to save the Chinese revolution and Chinese communism. It is at this time that the theory of socialism with Chinese characteristics[6] was adopted to justify the introduction of important elements of market economy. In this context, intellectual property emerged as one of the key legal tools to provide solid guarantees and safety to the coveted foreign investors. It is in this context, China started implementing its first IP laws[7] and initiated its accession into the most important International IP treaties.[8] During this phase, the interests of China in developing a modern and friendly IP environment for foreign investors coincided with the interest of the developed countries to access a very palatable new market with a certain degree of legal safety. In spite of the will of the leaders and the central government, however, historical factors and policy contradictions contributed to the slowness of reform, as well as to the appearance of a gap between the legislative reform movement in Beijing and the way such laws were interpreted and applied at the different administrative and judicial levels. 

Building a modern IP system from an antiquated system that lacked a proper legal IP tradition was like inoculating a foreign body in China’s inner structure.[9] The need to attract foreign investors and to protect their rights conflicted with local interests of rejuvenating underdeveloped and neglected regions of the country, curing widespread poverty, the then rudimentary administrative and judicial system in charge of IP protection, and the ongoing mistrust of foreigners ingrained in the Chinese leadership and in the CPC.

Access to the WTO and China as the World Factory

In the years running up to and following China’s 2001 accession to the WTO, the reform and modernization of the IP system was further compelled and accelerated by the massive expansion of China’s market economy and its opening-up policies. By that time, China had become the world’s factory. Steady economic growth, the birth of a modern industrial infrastructure centered on profit, and supporting private enterprises made China hungry for more innovation and homegrown developments. At the same time, the early 2000s saw the emergence of China’s middle class, hungry for foreign brands and luxurious lifestyles. In order to feed the double-digit growth, China needed to keep attracting foreigners. This explains again China’s eagerness to undertake a massive modernization of its IP laws during the first ten years of the twenty first century in order to align itself with the latest best practices and international standards in IP.

Meanwhile, a class of IP specialists in the private practice sector as well as in the judicial one, had increased the sophistication of the system overall. However, the old tensions between China’s eager march towards the modernization of its IP law to achieve the ultimate goal of blossoming into a modern and prosperous socialist country, clashed with old conflicting interests. Corruption at all levels of the government and the party administrations, a greedy and reckless entrepreneurship, and the uneven growth among the different provinces and social classes made the application of the modernized laws difficult, uneven, and ineffective in many cases. This dichotomy between the written law and the applied law kept widening and remained a source of grievance for the US government and those of other developed countries.

The Changing of China’s Economic Model for Future Development

After 2010, during the last years of the tenancy of the CPC secretary Hu Jintao and the premier Wen Jiabao, and the first years in power of the tandem Xi Jinping/Li Keqiang, clear signs of stress of the Chinese economic system started to become more visible. The export-driven model that for decades had supported China’s fantastic growth, started to show signs of wear. The party and the government realized that competition with the other world powers required China to quickly shift from an economy based on low cost manufacturing and export to an economy based on innovation, high-level manufacturing, and the opening and development of modern supply and service sectors. In this transition, China suffered from a manufacturing overcapacity and had to deal with an obsolete system of State Owned Enterprises (SOEs) operating in key industrial sectors.

During this period the Chinese government initiated more campaigns geared towards stepping up the enforcement of IP rights. This period witnessed rampant, although not systematic, police and administrative enforcement against counterfeiters. Also during this period, occurred some of the most significant wins in courts for foreign IP right holders, especially in trademark and copyright infringement litigation. However, patent and trade secret cases did not experience the same progress. Litigation was still largely influenced by political and economic factors, especially when concerning technologies in key industrial sectors. These difficulties were clearly related to the desire to protect the emerging Chinese innovation champions and to safeguard the playing field of the SOEs system. It is maybe no coincidence that the reluctance in enforcing foreign patents or trade secrets, while tolerating theft and infringement of foreign technologies, was somewhat functional to the goal of supporting the quick development of the innovation capacities of local enterprises, all while the issue of overcapacity of the industrial sector may explain the tolerance of counterfeiting!

In all these years from 1978 to the ascent to power of Xi Jinping in November 2012 China had been willing to incorporate international legal standards in its legal system. This is because it was an expedient tool to support its reform and opening-up policies. This, in turn, reflected the need for China to adopt Marxism. The theoretical assumption at the base of the Marxism adaptation is that China is still in the primary stage of socialism. This means that China has to first develop a capitalistic structure through economic, political, cultural, social, and ecological progress. The CPC and the government had to promote development and reforms based on this assumed theoretical factor. This, rather than the external pressure, explains both the choice of China to modernize its IP laws and the simultaneous need to pace down their implementation and further modernize its own peculiar interests. This explains also the tolerance of such contradictions, and the acceptance of the fact that the system could not immediately achieve perfection.[10]

The Last Three Years

The rise of Xi Jinping to power as the Secretary General of the CPC, and President of the People’s Republic of China in 2012 coincided with a period of radical changes at the party and constitutional level that heralded what many China experts refer to as the Third Revolution.[11] Xi Jinping inherited from his predecessors a weakened CPC and government apparatus, riddled by corruption and burned by ferocious consumerism. Years of unbridled economic growth had eroded the trust and respect the Chinese people used to have for the party that had rescued the country from century long turmoil and foreign dominance. The growing middle class was looking elsewhere, often outside China for new role models. Xi’s intervention focused initially on restoring the leadership and pre-eminence of the CPC. Like at the time of Mao Zedong, Xi’s effort was directed at putting the CPC above the rule of law, making the final decision on everything, including China’s economic and legal policies. This was achieved by amending the Chinese Constitution of 1982 and proclaiming in its core section that socialism with Chinese characteristics, i.e. the actual way of life of China, is only possible under the absolute leadership of the CPC.[12] Xi further consolidated his personal leadership by amending the 1982 Constitution’s two-years term limit for the party secretary, thus allowing himself to remain in that position for life. He then started a campaign to clean up the party from corruption and to limit foreign cultural influence in China, in a new wave of rather focused nationalistic propaganda.

Xi then ultimately launched his new thoughts on China’s reform, entitled: “Thoughts on Socialism with Chinese Characteristics for a New Era.” Xi touches upon opening up policies that are actually enshrined in the nation’s Constitution. Addtionally, Xi asserts that the development of a strong domestic market, the increase of internal demand, the transformation of China from the world factory to a world innovator – especially in key sectors where China is still heavily reliant on the US – are key strategic goals to be achieved by 2025.[13] As to innovation, the recent Fourteenth Five Years Plan has clearly indicated the need for China to increase indigenous innovation and reduce reliance on foreign technologies, where by “indigenous” innovation will have to be created by introducing, absorbing, and adapting foreign technology to Chinese capabilities.[14]

All these factors, with the ultimate goal of seeing China play a central role in the world’s history again, offer a model of development and a political alternative to Western capitalism.[15] These factors also serve as the major drivers behind the most recent reforms of China’s IP law system. 

During Xi Jinping’s tenure, instances of hidden technology transfer and disclosures by foreign rights holders increased. Instances of cyber espionage increased as well. Infringement by the Chinese side of joint ventures and partnerships with foreign entities also were on the rise. However, China recently made amendments to the criminal law regarding the punishment of foreign espionage. But the undertone of these amendments is a demand for reciprocity of treatment on the international stage. The thrust of that undertone being that if Chinese entities have to be treated fairly when operating abroad, such fairness must apply to foreigners in China.

We can say here that the trade wars may have indeed helped drive the argument of reciprocity in the head of the Chinese legislators, given the quick recognition for further ameliorations, especially of the patent law introduced in 2020. At the same time, the massive agenda and priorities set by Xi Jinping for China will have a predominant effect on all further reforms of the IP system. We will address this point in a future blog post in order to keep track of the direction and the longer term impact of any new significant amendments to the relevant IP regulations and their enforcement in China.      

Other Recent and Critical Events

The global Covid-19 pandemic rocked the whole world economy and changed the life of billions of people forever. Despite being labeled as the alleged source of the virus, China was among the few countries that reacted quickly and forcefully. This made China one of the first countries to corral the situation and get the virus somewhat under control. Its economy quaked for the first quarter of 2020, but it quickly recovered, and by the summer of 2020, internal consumption and economic growth were back on track. However, the closure of China’s factories and R&D centers, sent shockwaves worldwide. The dependency of Western industries on China became painfully evident. Shortages of goods plagued all kinds of industries, from automotive to pharma. While some relocation of supply chain away from China had started already a few years back, especially in the fashion sector – driven mostly by the rising labor and real estate cost – Covid-19 accelerated that trend. This compelled several foreign governments, including the US, Japan, and Australia, to encourage their own national companies to find supply chain alternatives outside of China.

Faced with such dramatic changes, as well as the need to find alternative ways to continue its path of reformation, to further its ambitious economic development agenda, and to find markets for its emerging homegrown technologies, China put in place some countermeasures. Polices like “Dual Circulation,” launched in the midst of the Covid-19 crisis, appeared to accelerate the plans for the creation of a stronger internal demand for massive investment in key and cutting edge technologies such as Quantum computing and AI. China’s future economic and social prosperity seems now to depend more on an upgrade of its supply chain and internal demand than on offering OEM facilities to foreign investors. Policies such as Made-in-China 2025, launched in 2015, already pointed in this direction. Recent polices, like that of the Dual Circulation, seem to strengthen the direction taken by the Made-in-China manifesto. That direction being one towards localizing technologies and brands to replace western ones in an expanded internal market where domestic demand and internal consumption serve as the main drivers of future GDP growth and accession into the global markets.[16] The Covid-19 crisis simply accelerated such policies’ progress. The same can be said for the new diplomatic offensives of China. The readiness of China to assist Europe during the early stage of the Covid-19 crisis illustrates China’s newfound activism within the international markets. China’s newfound willingness to intervene was juxtaposed by the US’s willingness to reduce its global diplomatic footprint. Some examples of this activism includes the very recent signing of the Regional Comprehensive Economic Partnership (RCEP); the largest free trade agreement in history. That signing complemented China’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which concluded in 2018 and is also dominated by East Asian members. Aditionally, the Belt and Road Initiative is another example of China’s recent augmented activist presence in the international markets. Latest in line is the frenzied negotiation for a trade deal between China and the EU to replace the US as China’s main business partner; a move seen as China’s assertion as a leader on the international stage.  

All these new internal and external policies will surely shape China’s IP developments in the coming years and should be considered when evaluating such developments and their concrete implementation.  

Conclusions

Although external pressure from other countries, especially the US has had a certain influence in the pace and quality of the changes that have characterized the path of modernization of the Chinese IP system, it has not entirely achieved the desired effect. This means that China’s decisions on how to reform its IP system and, perhaps more critically, how to implement it, have been affected more decisively by its own development policies, economic models, and strategic goals. Where such goals and policies coincided with foreign demands, China has always been ready to comply with the demanded changes. Other external factors, such as the Covid-19 pandemic have further accelerated some of these changes, especially those dictated by the Chinese need to further protect its newly emerging high tech sectors.

China’s new innovation policies, the disenfranchisement of its industries from the world’s factory model, various stereotypes, the upgrading of the supply chain, and the reform of SOEs, have all been driving factors for the recent reforms of the IP system. They can in fact explain the persisting contradictions of the Chinese IP system. Xi Jinping is pushing for China to innovate beyond the point of developing breakthrough technologies and inventions in cutting edge fields, but at the same time, he acknowledges that China may not be completely ready to be that lead innovator.[17] Therefore, in order to push economic development, China has settled for a cost-reducing, customization focused and “design as you build”[18] model of innovation. The key trait of this model is improving the breakthroughs of others and customizing those developments to local demand. Now, if China wants its inventions to play a key role in shaping the world’s future, reciprocity of the IP protection standards is a key factor. However, if adopting and absorbing foreign inventions is the path forward for China’s hopes of innovation, then IP laws and regulations that aim at creating a level playing field among all the market participants, may again be an obstacle to its innovation policies.

The judicial enforcement of IP rights has reached rather satisfactory standards, thanks in particular to the creation of specialized and modern IP courts and increased enforcement of trademarks and copyrights in China. However, as is the case on any nation’s path to reformation, new challenges threatening to stifle China’s development of its IP regime are beginning to emerge.

The IP system’s improvements have in fact coincided with the emergence of new challenges brought on by more sophisticated and complex forms of infringement. Many of these new forms and methods of infringement were at the center of the US’s complaints during the trade war. Additional complaints also derived from the theft and insufficient protection of trade secrets, challenging examination standards for pharmaceutical patents, insufficient regulations regarding patent-linkage or protection of alternative IP rights like trade dress, cyber espionage, forced IP transfers, indirect IP and know-how disclosure through opaque and poorly regulated administrative proceedings, restricted market access, etc.

In conclusion, while there are no longer problems when it comes to the protection of basic IP rights and enforcement, IP theft and IP challenges have moved to a higher level of legal and technical sophistication. This is primarily the result of the new Chinese economic policies and only in a lesser degree of the external pressure from the US and other developed countries. A shift of cultural focus and a rethinking of its strategies will be needed If the US wants to play a more effective role in influencing China’s IP policies in the future.

We will keep all this in mind in the coming posts as a key to read any future relevant developments in China’s IP laws, regulations, and jurisprudence.


[1] More broadly, the friction between China and the US originated from the US’s accusations of the unfair trade balance favoring China, an undervalued Chinese currency – the Ren Ming Bi (RMB) – and the lack of market access to US firms in key sectors, whereby no such restrictions were in place for Chinese firms in the US. For more analysis of the origins of the trade war see Lawrence J. Lau, The China-US Trade War, and Future Economic Relations (The Chinese University Press 2019).

[2] See Office of the US Trade Representative, 2020 Special 301 Report (2020), https://ustr.gov/sites/default/files/2020_Special_301_Report.pdf (the 2020 US Trade Representatives Section 301 Report listing all these allegations in a direct and clear manner. These include cyber theft, government steered theft of IP rights, forced IP transfers, inadequate patent protection and lack of contractual protection of licensing rights, among others.).  

[3] The Trade Act of 1974, 19 U.S.C. § 2411. This section of the act grants the Office of the United States Trade Representative (USTR) a range of responsibilities and authorities to investigate and take action to enforce U.S. rights under trade agreements and respond to certain foreign trade practices. See Congressional Research Services, Section 301 of the Trade Act of 1974 (2021), https://crsreports.congress.gov/product/pdf/IF/IF11346.  

[4] Examples of this cycle: in 1989 China signed a Memorandum of Understanding with the US, followed by tensions that escalated in trade disputes in 1995, also solved by another agreement (China-US Agreement on Intellectual Property), follow by another accord in 1996.

[5] China acceded to the Word Intellectual Property Organization Convention in 1980, the Paris Convention for the Protection of Intellectual Property in 1984, the Berne Convention for the Protection of Literary and Artistic Works in 1992, and the Geneva Phonogram convention in 1993.

[6] Socialism with Chinese characteristics (中国特色社会主义) was a concept introduced during the tenure of Deng Xiao Ping. It was initially characterized by the concept of opening up to a certain degree of market economy to attract foreign investments to increase productivity and modernize the country, especially the poor and the countryside. This move was justified as the necessary capitalistic stage of a country transformation to communism as formulated by Marx.

[7] The very first China Trademark Law dated 1982 and was then amended in 1993, 2001 and in 2014. The first patent law of China was adopted in 1984 and subsequently amended in 1992, 2000, 2008 and 2020. The first copyright law was promulgated in 1991, while the law of unfair competition was promulgated in 1993 and amended in 2019.

[8] China acceded to the Word Intellectual Property Organization Convention in 1980, the Paris Convention for the Protection of Intellectual Property in 1984, the Berne Convention for the Protection of Literary and Artistic Works in 1992, the Geneva Phonogram convention in 1993.

[9] Daniel C.K. Chow, The Legal System of the People’s Republic of China 429, (West Academic Publishing, 2013) (“The situation for intellectual property in China has been described as the transplantation of a set of concepts from the west to a society that has long adhered to a set values that is inconsistent with those concepts.”).

[10] Xi Jinping, The Governance of China 11 (Vol. I, Foreign Languages Press, 2014).

[11] Elizabeth C. Economy, The Third Revolution, Xi Jinping and the New Chinese State (Oxford University Press. 2018).  

[12] This was revolutionary. In the 1982 Constitution, the CPC had only been named in the preamble and not in the legal body of its text, and only when depicting the historical background of the Constitution. Unlike the previous Constitutions of 1974 and 1978, that of 1982 sought to put the party underneath the rule of law in order to avoid a repeat of the arbitrary excesses of the Cultural Revolution.

[13] China Belt and Road Initiative and Made-in-China 2025 are among Xi Jingling policies to move China from an export reliant to an innovation oriented economic system, where innovation is created independently from foreign know-how, and where China will have own brands replacing foreign brands in the domestic market.

[14] Congressional Research Service, China’s 14th Five-Year Plan: A First Look (Jan, 5, 2021), https://crsreports.congress.gov/product/pdf/IF/IF11684.

[15] Xi Jinping, The Governance of China 92 (Vol. III, Foreign Languages Press, 2020). In a speech at a study session of his own Thoughts on Socialism with Chinese Characteristics in a New Era, in January 2018 Xi Jinping stated clearly that: “…socialism with Chinese characteristics has entered a new era. We must realize that this era is one of socialism with Chinese characteristics, not for some other models….”

[16] Congressional Research Service, China’s 14th Five-Year Plan: A First Look (Jan, 5, 2021), https://crsreports.congress.gov/product/pdf/IF/IF11684. This policy of Dual Circulation has been formally adopted in the fourteenth Five Years Plan by the Fifth Plenum of the 19th Central Committee of the CPC in October 2020.

[17] Xi Jinping, The Governance of China 287-98 (Vol. III, Foreign Languages Press, 2020). Referencing Xi Jingping’s speeches at the Joint Session of the 19th Meeting of the Members of the Chinese Academy of Sciences and the 14th Meeting of the members of the Chinese Academy of Engineering on May 28, 2018.  

[18] David Brabbins, Lessons from China: what western brands can learn from Chinese smartphone giant Ziaomi, The Drum (Sept. 18, 2014), https://www.thedrum.com/opinion/2014/09/18/lessons-china-what-western-brands-can-learn-chinese-smartphone-giant-xiaomi.

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