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Trade liberalisation and overall relationship

2 - Market access and protection of IPR in China

Grade: B-
Unity 4/5
Resources 3/5
Outcome 5/10
Total 12/20
Scorecard 2010/11: B- (12/20)

The EU and its member states are relatively united and committed. The fault lines between the EU and China are shifting from intellectual property rights to patents and innovation.

The EU wants better protection of intellectual property rights (IPR) as a foundation for better market access for European companies in China that are exposed to involuntary technology transfer through joint ventures. These areas fall primarily under the remit of the European Commission, but some countries such as Denmark, Germany, the Netherlands and the UK also pursue this actively in their bilateral relationships with China. Eastern European countries are generally less interested because their companies export and invest less in China. Patent law is an increasingly important issue given China’s commitment to move up the value chain in the future. Another key issue has been China’s “techno-nationalism” – in other words, the development of technology on a restricted national rather than an inclusive global basis. In 2010, the EU won a victory when China made concessions on its policy of indigenous innovation, which favours Chinese companies by channelling orders and giving them subsidies.

There was some progress on intellectual property in 2011. In March, the Chinese government began a national campaign to clamp down on infringements on IPR. Later in the year, the ministry of commerce also increased more permanent co-operation with other ministries, as the EU had encouraged it to. The EU commented on the revision of China’s trademark law, a key element of the Chinese IPR system which is still being updated. However, the continued explosion in China of low-quality patents with no checks on their validity continues to makes it hard for European small businesses to enter the Chinese market without engaging in litigation. After last year’s success on indigenous innovation, the “buy Chinese” policy on innovation seemed to pop up under new labels such as “independent innoikiiation” this year. For example, provincial governments began publishing shopping catalogues for public purchases that included only domestic providers.