XIAMEN: The Chinese government has been making every effort to improve the protection of intellectual property rights (IPR) in the country, government officials said at the APEC (Asia-Pacific Economic Co-operation) High-level Symposium on IPR, which was held in Xiamen yesterday.
     "China has been laying great emphasis on the issue, which is a key part of improving the country's investment environment," said Fu Ziying, Assistant Minister of Commerce.
     He cited China's promulgation of the Interpretation of Several Issues Regarding the Enforcement of Specific Laws in Handling Criminal Cases of IPR Infringement as evidence of progress.
    "It is a move that has laid a solid foundation for further strengthening the judicial protection of IPR, which also helped China to reach the WTO's (World Trade Organization) requirement on the issue," Fu said at the event, which is part of the Ninth China International Fair for Investment & Trade.
    In addition, a working group has been established, with a membership including Vice-Premier Wu Yi and ministerial leaders from 12 IPR related administrative and judicial departments.     The group has affiliated offices in 31 provinces, autonomous regions and municipalities, Fu said.
    Ma Enzhong, vice-secretary-general of the State Office of Intellectual Property Protection, spoke of the newly established inter-regional joint enforcement mechanism.
    He said that the mainland and Hong Kong have established a Guangdong-Hong Kong working group for IPR protection, and that 16 provinces, autonomous regions and municipalities have signed the Inter-Provincial Joint Enforcement Agreement for Administrative Protection of Patents.
    Similar joint programmes have also been set up in the Yangtze River Delta and 10 provinces in central and southern China.
    Ma said that since last September, nine administrative enforcement departments have acted together for a nationwide specialized campaign against IPR violation, cracking down on piracy, counterfeiting, illegal trademarks and patent infringement.
    "The campaign has achieved a great deal," he said, referring to the 24,189 trademark infringement cases handled by industry and commerce administrations since the campaign's launch, which have resulted in the imposition of 157 million yuan (US$19.36 million) in fines.

    Meanwhile, copyright and cultural agencies have seized more than 167 million pirated products, destroyed 24 assembly lines for illegal disc production and banned over 2,960 illegal printing spots, he said.
    A total of 1,115 instances of patent imitation and 153 patent counterfeit cases have been investigated by patent offices, and customs authorities have handled 949 IPR infringement cases involving imported and exported goods with a total value of 73.04 million yuan (US$9.01 million), Ma added.
He also revealed that public security units have handled 1,300 IPR infringement cases, and arrested 3,000 criminal suspects linked to illegal goods worth a total of 1 billion yuan (US$123.30 million).
    Fu was keen to emphasize China's role in strengthening international co-operation on the issue.
    In 2004, the Sino-US IPR Protection Working Group was set up under the Joint Commission of Commerce and Trade of China and the United States.
    IPR exchanges and co-operation have also been conducted with a variety of countries and regions, including Brazil and Mexico.
    China has been actively involved in all IPR-related activities organized by APEC and other international organizations, and has strengthened interaction and collaboration with these institutions.
    Foreign direct investment (FDI) in China dipped by 3.4 per cent year-on-year to US$98.6 billion from January to July, according to the Ministry of Commerce. In April, the FDI even plunged by more than 20 per cent, the first decline since 2000.
    Referring to these figures, some scholars have suggested the world's largest FDI recipient is losing ground to its neighbours amid ongoing global industrial relocation.
    However, the decline can most likely be put down to growing pains suffered by a nation that is attaching more importance to the sustainable development and transformation of its economic structure.
     From now on, China will pay greater attention to trade in services, just as we have done for trade in commodities. The service sector will be a key attraction for foreign investments in the future."
     This means the nation will no longer purely pursue large scale foreign investment, it will put quality first.
     For a long time, China's labour-intensive manufacturing sector has been a generous recipient of foreign funds, which did solve the funds shortage problem that was causing the
national economy to bottleneck. At a time when personal savings were quite small, foreign capital was the only way to activate the economy. The country has now become the world's third largest trader, exporting a wide range of commodities that are seen in almost every corner of the planet.
     However, problems such as environmental damage and high energy consumption emerged as the gross domestic product was surging. They underpin the urgency for Chinese industries to climb up the global added-value chain and force the government at all levels to select foreign investors that will provide support in these areas.
     The transformation in the nation's attitude towards foreign capital is also propelled by increased competition in the global market.
     In the latest tide of global industrial relocation, China appears to be challenged by its neighbours such as Viet Nam and Thailand in labour and land prices. After years of growth, operating costs in its relatively developed regions such as the Pearl River Delta and Yangtze River Delta have multiplied, forcing some foreign investors to withdraw their production from China and relocate to places with cheaper labour and raw materials.
     With its comparably well-trained workforce and rising numbers of technicians and researchers, the nation now has the ability to attract the R&D centres, advanced manufacturing links and even regional headquarters of multinational corporations. The trend is particularly prominent in its big municipalities such as Shanghai, Beijing and Guangzhou.      Shanghai, for example, has become the regional base for more than 40 multinational corporations.
     What is more, the harsh lessons learned by certain developing countries that absorbed too much foreign investment into their preliminary manufacturing sector should be a warning to China.
      Several Latin American nations enthusiastically courted foreign investors -- as China did in the 1980s -- but neglected to upgrade their industrial infrastructure. This resulted in a serious economic downturn in later years after these foreign investors moved their production to other countries with cheaper labour.
      Unless it bears these lessons in mind, China may also fall into what economists call the post-foreign investment "industrial hollow."
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Editorial Department of International Investment Express for the ninth China International Fair for Investment and Trade
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