Innovating while pirating: The intellectual property dilemma of China

Counterfeiting and piracy are rampant and widespread issues in China today. At the same time, China is rapidly developing its innovation capacity to become not only a global leader in economic size but in innovation and technology as well. This presents an interesting dilemma for China. This thesis begins by evaluating counterfeiting and piracy in China, followed by an examination of China's recent shift to focus on a knowledge economy. It then proceeds to determine why this phenomenon is occurring in China at this time, from both domestic and international perspectives. Cultural, economic, intellectual property and other factors are considered and evaluated for relevance. It argues that culture plays an insignificant role in the proliferation of counterfeiting and piracy, which is instead attributed to economic factors, imbalance of intellectual property laws in the global context and enforcement issues. On the other hand, innovation is driven by cultural influence, economic necessity, and government policies. This thesis then addresses the question of whether China should harmonise its IP regime with those in more developed nations like the United States. It finds that China should not simply accept further harmonisation, be allowed flexibilities to develop its own IP regime, taking into account its specific economic, cultural, and social needs. Finally, it proposes strategies to overcome the counterfeiting and piracy issues in China. The combination of these findings lead to the assertion that China's piracy-innovation dilemma is a necessary, albeit controversial, stepping stone in its journey to become a modern, innovation-driven knowledge economy. This phenomenon is not unique to China and has been experienced by present day developed countries during their developing stages. However, China will soon offer stronger intellectual property protection to facilitate this transition, when it is in its best interests to do so