Academic journal article Chicago Journal of International Law

China's Indigenous Innovation Policies under the TRIPS and GPA Agreements and Alternatives for Promoting Economic Growth

Academic journal article Chicago Journal of International Law

China's Indigenous Innovation Policies under the TRIPS and GPA Agreements and Alternatives for Promoting Economic Growth

Article excerpt

Abstract

China's intricate web of Indigenous Innovation policies affords preferences in government procurement to certain high-technology products whose intellectual property is owned or registered in China. While the the policies were intended to strengthen China's national economy, they have been heavily criticized, notably by the US and the EU, as a strategic attempt to commercialize non-Chinese proprietary ideas in China and as a trade barrier that harms all stakeholders in the world marketplace. Although China's State Council recently committed the country to repealing several key Indigenous Innovation measures, the extent to which Indigenous Innovation preferences will be implemented by the local Chinese governments, which have significant autonomy in administering national policy measures, remains elusive. This Comment analyzes the legal status of Indigenous Innovation policies under the TRIPS and the GPA Agreements, examines the economic and policy goals underlying the policies, and concludes by considering alternative and mutually preferable solutions that would allow both China and its foreign competitors to achieve their technological and economic growth objectives.

Table of Contents

I. Introduction......... .................................................................................................... 756

II. Background: The Desire for Indigenous Innovation ......................................758

A. China's Evolving Role in the World Marketplace..... .............................. .....758

B. Hurdles on the Road to Innovation........... ................................................. ...759

C. Previous Attempts at Advancement .............................................................. 761

III. Implementing Indigenous Innovation ............................................................. 762

A. A New Policy Framework.. ............................................................................. 762

B. Concerns of Foreign Companies... ................................................................ .764

C. Recent Developments: A Rapidly Evolving Policy Framework. ............. ..765

IV. Legality under TRIPS and GPA........................................................................768

A. Potential Conflicts of Indigenous Innovation Policies under TRIPS. ...... 768

1. Article 3: National treatment. ...................................................................... 768

2. Article 20: Other requirements. ..................................................................772

3. Article 27: Patentable subject matter........... ............................................... 773

B. China's Broader Legal Obligations: Potential Conflicts under the GPA........................................................................................................ 775

V. Indigenous Innovation Economics and Legal Solutions for Future Growth............................................................................................................... 776

A. Indigenous Innovation Policies May Be Neither Strategically Nor Economically Sound................................................................................... 776

B. Alternative Strategies for Stimulating Indigenous Innovation ................... 777

1 . Increase government investment in R&D.. ............................................... 778

2. Strengthen IP protection within China...................................................... 779

VI. Condusion............................................................................................................780

I. INTRODUCTION

China has recently escalated its efforts to transition from a manufacturingbased economy fueled by an abundance of cheap labor to an innovation-based economy driven by expanding its foundation of domestically owned intellectual property (IP). …

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