China is frequently criticized for not upholding international standards on intellectual property rights (IPR) protection. Leaders in Beijing understand the importance of creating a stronger IPR regime not only for ensuring continued FDI, but also for protecting rising indigenous innovation. However, national IPR laws themselves are less important than the enforcement of those laws, which tend to vary across the country and generate criticism abroad. This week’s GR Energy and Climate Brief explores the causes of this variation and inconsistent rulings throughout China and the efforts to make Chinese IPR more robust.

Although IPR protection has been a key source of tension in US-China relations, highlighted by the high-level IPR negotiations during the recent visit of Chinese Vice President Xi Jinping, little of this discussion has targeted the uneven implementation and enforcement of IPR law within the country. Although Beijing understands that IPR protection is a lynchpin to making continued economic growth possible, some regions, particularly the coastal industrial hubs, have been early adopters of reforms, while others have been extremely slow in acting. The great inconsistency and variance in IPR enforcement across China’s many regions cut against the image of a politically centralized and homogeneous China. As such, it is a key test for the government’s ability to maintain control over the far-flung provinces while recognizing the economic strengths and weaknesses of its disparate regions. Today’s GR Energy and Climate Brief examines the drivers of regional inconsistencies in administrative and judicial enforcement procedures and assesses China’s ongoing efforts to reform intellectual property protection.

IPR Enforcement: Reflection of Regional Priorities: IPR protection in China is so uneven today because enforcement is entirely devolved to the local level. Whether one chooses to pursue administrative or judicial action (in the country’s complex and overlapping enforcement structures), depends on the relative prioritization of efficiency versus prospects for higher remuneration. No matter which avenue a company pursues, however, the effectiveness of the enforcement mechanisms reflect local prerogatives. As shown in the graphic below, the coastal high tech hubs – Shandong, Guangdong, Zhejiang and Jiangsu – together account for over 40% of IPR enforcement cases. The inland provinces of Guangxi, Shanxi, Chongqing, Gansu, Qinghai, and Tibet are the furthest behind, accounting for merely 2% of the total cases. It is no coincidence that regional leadership in the enforcement of patent protection correlates highly with the number of patents issued in a particular region, which is a function of both the level of economic development and the concentration of high-tech industries. As major cities outside of the current industrial hubs develop IP-intensive industries of their own, they will be more willing and likely to make the application and enforcement of IPR a priority.

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