On September 18, 2017, China announced a tough crackdown on intellectual property infringement. With the Chinese government assigning various bodies specific roles, the crackdown aims to fight knock-offs, combat copyright infringement and fight trade secret theft.
Like many new policies, this policy is probably related to larger economic and geopolitical trends. China is concerned about declining foreign investment because foreign investment in China dropped by six percent. The South China Morning Post notes one oft-cited reason for declining investment is foreign investors’ fear that their intellectual property will not be protected.
Additionally, various governments have expressed concern about China’s approach to intellectual property. While Canada is contemplating signing a free trade agreement with China, Canada has expressed concerns about China’s protection of intellectual property. More stridently, American President Donald Trump has ordered a trade investigation into China. Since Trump will probably be visiting China this year, this move may be an attempt to soften Trump’s stance.
What is particularly interesting is some foreign companies’ responses to this crackdown. The day after China announced their crackdown, Hitachi Metals, a Japanese company, stated a Chinese company violated their intellectual property. Will these changes result in more cases like Hitachi Metals? Only time will tell.