Lawyers from all over the world believe that IPR protection is much weaker in developing countries in comparison with developed ones. Therefore, the following question arises – if China’s IPR record is out of consideration, will its IPR income level be better or worse?

To answer the aforementioned question, scientists examined countries royalties and their license fee payments to foreign patents, copyright, which are included in the balance of payment data issued by the IMF.

According to the IMF data, the country’s income level and IP payments are in a close direct relation with each other. 1% increase per capita income is associated with 1.85% IP payment increase. In other words, it means that if a country becomes richer, hence its economy becomes more complicated and its IPR protection significantly strengthens.

If Chinese companies were systematically using foreign IP without compensation to a greater extent than other countries at a comparable income level, China’s IP payments would be low for its income level. However, in practice there is another situation. On the contrary, China’s IP payments have grown immensely since 2000. For example, before China joined the WTO in 1999, its IP payments were approximately $1.3 billions, while by 2017 China’s IP payments had increased to $28.7 billions. This statistic directly implies that China’s IP payments have grown on average by 20% annually. If we compare China’s IP payments with IP payments of European countries, like France (7,9%), the Republic of Korea (6,5%) or Mexico (-1,9%), we’ll reveal that their IP payments annual rates are lower than China’s.

The other way to evaluate China’s IPR protection is to examine where multinational companies place their operations. As a rule, multinationals won’t locate their operations in those countries where their IPR will be abused on a great scale. 2018 statistic demonstrates that China was the key region for foreign direct investment (FDI) among the entire world with the exception of the USA; it continues attracting more FDI.

Despite a high rate of China’s IP payments and IPR protection, its IP regime is still far from perfect. But China continues working on strengthening IPR protection, opening IPR courts alongside the country, making amendments in “Trademark law” and improving IP legislative body work

Photo by <a href=”″>rvandermaar</a> on <a href=””></a> / <a href=””>CC BY</a>


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