The Current Intellectual Property System in China: What Does it Mean for Multinationals?

The term ʻintellectual property ʼ(IP) is often referred to as legal rights given to its owners for their intellectual creations and by which they have exclusive rights to prevent others from using them without permission. With Chinaʼs entry into the World Trade Organization (WTO), intellectual property is becoming an increasingly significant topic for the country. As one of the largest recipients of foreign direct investment (FDI), the Chinese governmentʼs intention is to encourage the introduction of advanced technologies. One can expect intellectual property, especially in the context of advanced technology, to be a significant issue at present and in the future. The aim of this chapter is to systematically review the merits and drawbacks of intellectual property system in the Peopleʼs Republic of China (China) and highlight implications for multinationals in doing business. With the aim in mind, the chapter is structured as follows. First, it discusses the current intellectual property system from three perspectives – legislative guidance, administrative control and judicial enforcement. Second, the article presents statistical evidence of intellectual property activities in China since the 1980s, with patents and trademarks as examples. Third, it presents a critical review of the current system. Finally, the chapter draws implications from the study for international business managers in a strategic context