It’s clear that one of China’s major priorities is technology innovation, as the PRC is a world leader in quantum research, challenging the USA in the race to develop quantum computers, as well as creating its own successful space program.
In recent years, a handful of Chinese companies have emerged as global innovators and have joint forces in order to achieve a unified goal. Zhejiang province, where internet giant Alibaba is located, just pledged a $17 billion commitment to driving technology over the next five years. This group includes companies such as Alibaba, Haier, Baidu, and Tencent. These companies are challenging the R&D strategies of foreign companies and are leaders in making ideas commercially viable.
Another real surprise is the country’s startups scene, which is somewhat less obvious and contains hidden potential in a myriad of pioneering companies that are quietly disrupting various industries and developing new products and business models. Companies seeking to operate in China or compete globally can see how each type of innovator conducts business and understand what multinationals may be up against in the future. Most of them are tech pioneers, working on projects for electronic products, exploitable in business sectors such as automotive or smart devices.
Research and development (R&D) is the backbone of innovation. Intellectual Property (IP) protection, such as patents, are critical for innovation and they are also one way to measure innovation trends. Patents secure exclusive rights to an invention, and thereby offer insight into key areas of innovation. This feature assesses the relationship between patents and innovation by exploring trends in patent applications by Chinese inventors at various different patent offices.
According to WIPO’s annual World Intellectual Property Indicators (WIPI), they report that innovators across the globe filed 3.3 million patent applications in 2018, up 5.2% for a ninth straight yearly increase.
Asia continues to outpace other regions in filing activity for patents, trademarks, industrial designs and other intellectual property rights. China alone accounted for almost half of all the world’s patent filings, with India also registered impressive increases, making Asia the global hub for innovation.
Asia accounted for more than two-thirds of all patent, trademark and industrial design applications in 2018, with China driving overall growth in demand for intellectual property (IP) rights as the United States of America (U.S.) maintained its primacy in patent applications filed in export markets.
Beijing has implemented several measures to improve China’s patent system. In 2008, the Chinese government started a national IP strategy and passed revisions to its existing Patent Law. The National Patent Development Strategy began in 2010 and in January 2019 new amendments to the Patent Law were proposed.
Government efforts have had an impact as China has rapidly become the world leader in patent applications. China’s IP office received the highest number of patent applications in 2018, a record 1.54 million applications that amounts to 46.4% of the global total and 708,799 industrial design applications corresponding to 54% of the world total.
China’s relatively small contribution to the total number of triadic patents is also notable. These patents – filed jointly in Japan, the United States, and the European Union – are considered the gold standard among patents. Triadic patents are difficult to obtain, but generally generate more revenue than other patent types. In 2016, China was the fourth largest contributor to triadic patents at 6.9 percent, behind Japan (31.0 percent), the United States (25.4 percent), and Germany (8.1 percent).
In a press conference in January, the Chinese National Intellectual Property Administration (CNIPA) released the annual statistics of 2019 indicating a drop of 9.1% in invention patent application filings from 2018. The drop in invention patent applications may indicate a slowing economy or an increase in patent quality. Nonetheless, Chinese invention applications filed in 2019 totaled a staggering 1.401 million. The CNIPA also stated that 453,000 invention patents were granted in 2019, a 4.8% increase from 2018. The top three invention patentees were Huawei Technologies Co., Ltd., China Petroleum & Chemical Corporation, and OPPO Guangdong Mobile
Innovation is the process by which new knowledge and ideas are created. Global leaders in innovation produce the scientific discoveries and technological advances that shape the modern world. It is a primary source of national power, a country’s ability to develop new products and methods of production enables it to produce the goods desired by others. In turn, innovation creates wealth, leads to technological advancement, and fosters further innovation through the development of derivative products. When measuring China’s growing international influence, it is essential to consider the sources of Chinese innovation.
*This article was published on the Nanjinger magazine on June 2020.