China and IPR, part I-A Persistent Problem with Property?
China’s protection of intellectual property (IP) remains a continuing and serious issue for foreign companies as the United States Trade Representative (USTR) made manifest in its 2021 Section 301 report and 2021 Report to Congress on China’s World Trade Organization (WTO) Compliance and the European Commission conveyed clearly in its 2021 Report on the Protection and Enforcement of Intellectual Property Rights in Third Countries. It clearly is a topic of contemporary concern for policymakers as evidenced by a US-China Economic and Security Review Commission hearing in mid-April where one-quarter of the individuals testifying offered some or extensive remarks about China and its IP rights (IPR) practices and by Japanese representatives communicating their IPR concerns to their Chinese counterparts in late 2021 via the Japan-China Joint IP Working Group after a two-year lull. The topic also merits greater academic attention given its potential to shed light on China’s economic priorities, economic policymaking and implementation, and economic relationship with the US as well as the impact of the WTO on Chinese trade practices and the effect of Chinese sub-national (e.g., provincial and municipal) and corporate actors on China’s IPR practices.
There are many global, regional, and bilateral agreements setting forth China’s IPR requirements. At the global level, the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPs) clearly is the most important, albeit not the only, agreement. China, for instance, also is a signatory to the WTO Trade-Related Investment Measures (TRIMS) agreement and the Madrid Agreement Concerning the International Registration of Marks. Regionally, China has obligations as a result of its membership in the Regional Comprehensive Economic Partnership and the China-Association of Southeast Asian Nations Free Trade Agreement (FTA). Bilaterally, it has, for example, commitments linked to its January 2020 Phase One deal with the US, past agreements with France and the United Kingdom, and its FTAs with countries such as Australia, Peru, and Switzerland. China has moved on numerous fronts domestically to protect IPR. It issues regular IPR protection plans, passes numerous IPR laws, creates and reforms judicial bodies, and runs various IPR education and training campaigns.
In any event, it was China’s accession to the WTO that drove a sea-change in terms of Chinese IPR laws, administrative and judicial structures, and enforcement mechanisms. From 2001 onward, China has made improvements to its IPR ecosystem as will be detailed in the next blog. While China’s fulfillment of its IPR obligations de jure or in form—e.g., through the modification of laws relating to copyright and patents and the issuance of judicial decisions on matters such as preliminary injunctions—has won plaudits, widespread business and government complaints about China’s adherence to its commitments de facto or in practice continue. The aforementioned USTR reports charge, among other things, that China fails to protect foreign patents, continues to force technology transfers, unsatisfactorily enforces existing IPR laws and regulations, does not give IPR holders sufficient rights to defend their IP, does not do enough to prevent bad faith trademarks, has not moved aggressively enough to counteract the sale of counterfeit goods online, and does not adequately protect data submitted for review.
Beijing predictably dismisses government and corporate criticism of its record in meeting its global, regional, and bilateral IPR obligations. To illustrate, in response to a US government report identifying China as a country with companies and markets notorious for counterfeiting and piracy, Beijing retorted that the US lacked evidence, should recognize China’s progress in protecting IPR, and should acknowledge its own counterfeiting and piracy problems. It emphases that it is a “defender of the international intellectual property rules” as evidenced by it joining “all major international conventions” on IP, its establishment of IP cooperation mechanisms with more than 80 countries and regions,” and its active promotion of bilateral and multilateral IP cooperation. As if this was not enough, China’s Foreign Ministry highlights its huge number of successful foreign patent applications and trademark registrations, its implementation of its US-China Phase One agreement IPR commitments, and its active training IPR training efforts in Belt and Road Initiative (BRI) countries. As one might expect, China regularly touts its efforts to destroy or seize goods that infringe on the IPR of others and the increasing activism and efficiency of its courts in handling IP related matters.
Are US, European, Japanese, foreign industrial association, and foreign business complaints about China’s IPR performance just “fake news” designed to malign China? Are Chinese statements about its IPR achievements simple propaganda promulgated to cover its misdeeds? If there remain significant failings, what might explain China’s continued shortcomings in meeting its IPR commitments? If China’s IPR regime has evolved in a positive direction, what might explain China’s accomplishments? The next blog in this four-part series will focus on uncovering the “facts” through a selective review of what academics and analysts as well as the US government have said over time about China’s fulfillment of its IPR obligations. The third blog in this series will examine the international and domestic political, economic, and other variables that may be responsible for China’s IPR successes and failings. Understanding these factors is critical for intelligent policymaking, particularly since the relevant drivers can shift over time. The fourth blog in this series will delve into current US strategy as evidenced by the Phase One deal and recent USTR and other government statements and, in light of the third blog, evaluate if foreign companies and countries should pursue alternate strategies.
 “Special 301” Reports are available through the USTR website at https://ustr.gov/issue-areas/intellectual-property/special-301. A copy of the USTR “2021 Report to Congress on China’s WTO Compliance” can be found at https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republi.... The aforementioned European Commission report appears here: https://trade.eceuropa.eu/doclib/docs/2021/april/tradoc_159553.pdf.
 The link for The USCC agenda and hearing is https://www.uscc.gov/hearings/challenging-chinas-trade-practices-promoti....
 Jean-Marc F. Blanchard, “China and the WTO into the Next Decade: Probing the Past and Present as a Path to Understand the Future,” Asian Journal of Social Science, Vol. 41 (2013), pp. 243-262.
 For an overview of China’s IPR related agreements, see Han-Wei Liu and Si-Wei Lu, “The Future of China’s Trade Pact and Intellectual Property Rights,” In Kung-Chung Liu and Julien Chaisse, eds., The Future of Asian Trade Deals and IP (London : Bloomsbury Publishing, 2019), chapter 4. The Phase One Trade deal, formally the “Economic and Trade Agreement between the United States of America and the People’s Republic of China,” was struck by the US and China in mid-January 2020. The deal had multiple goals and required China inter alia to boost significantly its purchases of American goods, open its financial sector, improve its protection of IPR, and eliminate or reduce trade barriers against the agricultural sector. A copy of the agreement appears here: https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republi....
 Bryan Mecurio, “The Protection and Enforcement of Intellectual Property in China since Accession to the WTO: Progress and Retreat,” China Perspective, No. 2012/1, pp. 23-25.
 See fn(1) above.
 “China Opposes U.S. Releasing Irresponsible IPR Report: Commerce Ministry,” Xinhua, February 18, 2022, https://english.news.cn/20220219/7c060c19cc01439f839b21a2d0f8c93a/c.html.
 “China Wholeheartedly Upholds Intellectual Property Cause,” China Daily, December 16, 2020, https://global.chinadaily.com.cn/a/202012/16/WS5fd94347a31024ad0ba9c04f.....
 “Economic Watch: China Shores up IPR Protection, Winning Overseas Trust,” Xinhuanet, April 22, 2021, http://www.xinhuanet.com/english/2021-04/22/c_139899048.htm; “China Customs Seizes 71.8 Million Illicit Items over IP Infringements,” Global Times, January 25, 2022, https://www.globaltimes.cn/page/202201/1246829.shtml; “China Steps Up Judicial Protection of IPR: Reports,” Xinhuanet, March 8, 2022, https://english.news.cn/20220308/7033b38bfb9a46ac9fce48dcd0127471/c.html.