China (PRC)

China’s continued focus on technology and innovation will have a critical impact on intellectual property protection and enforcement, under the Mainland’s 13th Five-Year Plan, according to intellectual property specialist, CEO and Principal Counsel of AWA Asia *, Ai-Leen Lim.

China’s Five-Year Plan is a national strategy document set by the country’s top leaders. It sets out policies for economic growth and social development, identifies areas for investment that are promising, and points to where government resources will be concentrated.China’s 13th Five year plan is therefore the Mainland’s most anticipated social, economic, environmental and technological blueprint for advancement between 2016 – 2020. In late 2015, President Xi issued a Proposal on Formulating the Thirteenth Five-Year Plan (2016-2020) on National Economic and Social Development (13th FYP Proposal).

The building blocks of the 13th FYP include Innovation, Co-ordination, Green development, Opening up and Sharing.

“The communique aims to shift the country’s focus away from traditional state-led investment and dependence upon exports to an economy powered by consumption and indigenous entrepreneurship,” states Lim. The government plans to do this by injecting fresh incentives to sustain long-term growth and development.

Following a period of double digit growth and a widening gap between the rich and poor, the 13th FYP will emphasise consumption and services, which will hopefully guide the economy into its ‘new normal period’ in which the average annual GDP growth will be 6.5 percent until 2020, so as to address the ‘medium income trap’ with a view to achieving the goal of becoming a ‘moderately well off society’.

The world’s second largest economy will do this, in part, by upgrading technology and promoting innovation in the industry and service sectors with a view to boosting productivity and ultimately profitability. Lim comments: “By up-scaling the workforce and increasing workers’ wages, China aims to transition from a low-skilled manufacturing economy to a high-skilled manufacturing services and a consumption-based economy”.

Lim is setting her sights on clinching the inevitable work that will follow as a result of China becoming more innovative and providing a tech-competitive environment.

There will also be a transition from ‘Made in China’ to ‘Created in China’ as companies and start-up enterprises are encouraged to shift from Original Equipment Manufacturing (OEM) to Original Development Manufacturing (ODM.) This means that responsibility for designing and creating the specs for a product will lie with the manufacturer and not the buyer; a vastly different scenario to the one that China currently adopts and practices. “What this means under the 13th FYP is that manufacturers will need to strengthen their R&D skills, their product and brand designs as well as their marketing strategies to successfully make the move away from traditional equipment based manufacturing”, suggests Lim. One possible outcome of this shift is that foreign companies that were considering moving their sourcing away from China due to the rising costs and/or quality concerns may once again consider China as a location from which to source their products.

Moving away from conventional manufacturing will also entail importing and utilising new technology from overseas to pave the way for next-generation information and communication. By becoming more tech competitive, China will be able to innovate, upgrade its infrastructure, consider suitable energy efficiencies and environmental protections, expand its market into higher value industries and open up its economy to more modern and sophisticated services. No easy feat!

The government also intends to cultivate the next generation of internet related technology so that it will be embedded in traditional industries and drive economic growth. There will be a particular focus on implementing the Internet of Things and big data technology and application. The Internet of Things will link machines to other machines (M2M) across various networks with the aim of autonomously flowing the information between devices – creating a groundbreaking level of connectivity and convenience through smart homes and smart cities by 2020.

“The level and magnitude of application of intellectual property is potentially unprecedented. Navigating the new environment, from both a manufacturing and a corporate perspective will certainly require input and direction in terms of delivering innovative intellectual property solutions,” comments Lim.

* AWA Asia is the Asian arm of intellectual property heavyweight, Awapatent, which has a history of more than 100 years across offices in Sweden, Denmark and Germany. AWA Asia, which is currently celebrating its one-year anniversary, was established to provide direct assistance to its clients navigating the complex China market. The firm, also has a wholly owned subsidiary in China (AWA IP (Beijing) Co Ltd) which is a locally licensed intellectual property and trademark agency. In addition, AWA Asia’s Hong Kong headquarters handle all aspects of IP portfolio management directly before the Hong Kong IP Department.

For more information:
Ai-Leen Lim
AWA Asia
Phone: +86 10 8573 1125
Mobile: +852 6121 7911

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