Commemoration on the 10th Anniversary on China’s Accession to the WTO: A Decade of IP Development

By Guo Shoukang, Professor and Doctoral Tutor at Law School of Renmin University of China,[Comprehensive Reports]

December 11th, 2011 marks a historical moment for the 10th anniversary of China’s accession to the WTO, which is a milestone in China’s progression of economic reform, and “one for the WTO and the multilateral trade system as well.” The past ten years is not only a decade of China’s integration into globalization, but also a decade of transformation of China’s IP rules by the international ones. Moreover, during the past decade, China has also “localized” the IP legal system which was “brought into” China. The unprecedented influence of this decade upon China is profound and long lasting.
I. Transformation of China’s IP Legal System during the Decade after China’s Accession to the WTO
The WTO is a legal groundwork for international economic development. It has a complete set of standardized legal system, and one of its missions is to promote a series of multilateral trade agreements worldwide, which are legally binding and can fully represent the rules of the market economy, so as to marketize and liberalize trade activities. According to Paragraph 4 of Article 16 in Marrakesh Agreement Establishing the World Trade Organization, “Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.” This is a crucial provision that has a wide coverage, strong constraint strength, high level of unity and far-reaching influence. According to this provision, as a member of the WTO, China must take Marrakesh Agreement Establishing the World Trade Organization, the annexed Agreements and other related legal documents as the standards, comprehensively examine all the exiting laws, regulations and administrative procedures and take proper measures, that is, continue to implement those that fully conform to the Agreements of the WTO, revise those of partial conformity and thoroughly abolish those that do not conform at all.
To this end, the Chinese government made a commitment in the legal document for joining the WTO that “(the government) will implement the Agreements of the WTO effectively and uniformly through revising the current Chinese laws and drafting new laws that fully conform to the Agreements of the WTO.” Therefore, China has cleared a large scale of laws, regulations and rules, the total number of which was over 3,000. In the IP field, China has attached great importance to IP protection. Patent Law, Trademark Law and Copyright Law have been amended successively; Regulation for Computer Software Protection and Regulations on Customs Protection of Intellection Property Rights have been revised; Regulations for the Protection of Layout-design of Integrated Circuits and Regulation on the Protection of the Right to Network Dissemination of Information have been formulated; laws, administrative regulations and standards which do not conform to the Agreements of the WTO have been repealed. On such a basis, China’s IP legal system has been ceaselessly perfected so as to conform to the Agreements of the WTO, especially Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).
In addition, China has actively integrated its IP rules into the international ones. So far, China has signed more than 20 international IP treaties. An IP legal system which has a comprehensive range of protection, complete legal norms and advanced legislative concepts has been established by and large. We can say that the direct changes in the Chinese legal system and the indirect changes in the legal concepts caused by China’s accession to the WTO are no inconsequential as a reconstruction of the Chinese legal system 30 years ago. These changes have not only helped China establish its legal system, trade framework and market environment that can meet the requirements of the WTO and have higher levels of internationalization; more importantly, but also built a solid legal basis for China to fully integrate into the WTO, which is good for promoting rational, optimum and healthy development of the economic and trade communication between China and other members based on market rules and international standards.
II. Stimulation of China’s International IP Trade during the Decade after Accession to the WTO
The WTO is a global trade platform aimed at establishing a complete, sound and long-lasting global multilateral trade system, promoting trade liberalization and realizing common prosperity of all members globally. To this end, it requires all the members “to reach agreements on mutual beneficial arrangements, substantially reduce tariff and other trade barriers, and cancel discriminatory treatment in international trade relations.” China’s accession to the WTO ten years ago indicated that China has fully integrated into the world economic system which takes the modern market economy system as its premise and basis, the economic globalization as its feature and content and the multilateral trade agreements as its kernel and prop; meant that the market economic activities of China and other members would be further operated according to the universal rules of global market economic operation under the same constraint of multilateral trade system; implied that the way of economic and trade cooperation between China and other members would be changed from the previous unilateral, initiative and selective way to multilateral, regulatory and comprehensive way under the framework of the WTO.
Under the framework of the WTO, IP trade is one of the three targets of the WTO. TRIPs, Multilateral Agreements on Trade in Goods and General Agreement on Trade in Service are the three pillars of the WTO. So far TRIPs has been the most comprehensive IP multilateral agreement with the most adequate protection. It is also the first global multilateral treaty in history that is explicitly related to international trade. The inclusion of IP into the multilateral trade negotiations of GATT and the conclusion of TRIPs are the inevitable result of the development of world economy and trade as well as economic and technical globalization. The aim of TRIPs is to protect IP more effectively and more adequately in international trade so that the obligee can gain interests from his/her technical inventions and literary or artistic creations. The obligee is thus encouraged and will continue to invent or create so that the public can enjoy the material and spiritual achievements brought by technology and art as much as possible. TRIPs also aims at reducing the distortion and hindrance of international trade caused by IP protection to ensure that the IP measures and programs do not lead to barriers for lawful trade.
Intellectual property, a property relationship brought by advanced productive force, is playing a more and more important, or even decisive, role in people’s material and spiritual life. It is no doubt that knowledge industry will become the main industry as agriculture and manufacture industry have ever been successively. Knowledge creation will become the most influential way of human production, living and thinking. And IP trade will inevitably become the decisive factor for future world trade. Besides, the technical content and the brand value in commodity trade and service trade will also become the key factors in both kinds of trade. Knowledge, will dominate human beings; intellectual property, will dominate all fortunes; IP trade, will dominate all trades. Therefore, it is no accident that IP trade has become one of the three targets of the WTO.
Since China’s accession to the WTO, the volume of international IP trade has been soaring year by year. The total annual export-import volume of commodities has jumped from $ 509.8 billion in 2001 to $ 2972.8 billion in 2010. The total annual amount of export-import volume of high-tech products has increased rapidly from $ 110.6 billion in 2001 to $ 686.8 billion in 2009, almost 6 times of increase during eight years. The balance of trade of high-tech products has gradually changed from deficit to surplus as well: in 2001, China’s trade deficit o f high-tech products was $ 17.7 billion; in 2004, China’s trade deficit changed to surplus for the first time with an amount of $ 4 billion; in 2009, China’s trade surplus increased further to $ 67.1 billion. This fully demonstrates that the status of international IP trade in China’s foreign trade has been constantly rising.
III. Improvement of China’s Public Awareness of IP during the Decade after Accession to the WTO
IP system is not an innate system of China. As a receiver of legal transplantation, China does not have the tradition of intellectual property in history. Therefore, when Chinese people are trying to understand and to study intellectual property, they usually feel like viewing a scenery from the opposite side of a river. After China’s accession to the WTO, the Chinese government and society have gradually realized that intellectual property has become strategic resources for national development and core factors for international competitiveness as well as a crucial prop for the construction of innovative nation and the key to grasping the initiative of development with the development of knowledge economy and globalization going deeper. Therefore, the cognition of intellectual property of the whole nation has changed thoroughly. The most important change is that China has timely elevated its IP system to the level of a national strategy and has clearly put forward the concept of constructing an innovative country.
On January 13th, 2004, Vice Premier Wu Yi proposed for the first time the formulation and implementation of the national IP strategy on the National Patent Work Conference. On October 15th, 2007, President Hu Jintao put forward explicitly “the implementation of the IP strategy” in Report to the Seventeenth National Congress of the Communist Party of China. On June 5th, 2008, the State Council issued the Outline of the National Intellectual Property Strategy, which formally elevated IP system to the level of a national strategy so as to strengthen China’s ability of independent innovation and to construct an innovative nation through implementation of the national IP strategy. In 2010, Prime Minister Wen Jiabao wrote an article to emphasize that “we should steadfastly implement the national IP strategy, try our best to build a legal system, a market and a cultural environment to protect intellectual property, largely enhance the ability to create, utilize, protect and manage intellectual property and constantly improve the quality and benefit of the economic development.” Besides, some national policy documents such as the National Program for Medium and Long-term Talent Development (2010-2020), the Decision of the State Council on Accelerating the Fostering and Development of Strategic Emerging Industries and The 12th Five-Year Plan on National Economic and Social Development have all emphasized the significance and necessity of implementing the IP strategy.
What’s more, “the keen social awareness of catching up and surpassing” is the motivation and potential of late-developed innovation. The simulation of creation by IP has become one of the motivations for China’s economic development. Since China’s accession to the WTO, the amount of patent and trademark applications and the amount of voluntary copyright registration both have been increasing year by year. The amount of patent application experienced a sharp increase from 203,573 in 2001 to 1,222,286 in 2010, which is an increase of more than 5 times. The amount of patent authorization has increased from 114,251 in 2001 to 814,825 in 2010, which is more than 6 times of increase. The percentage of domestic patent authorization has increased from 34.9% in 2001 to 90.9% in 2010. The amount of trademark registration application experienced a sharp increase from 270,417 in 2001 to 830,477 in 2009, which is an increase of more than 2 times. The amount of trademark registration approval has increased from 202,839 in 2001 to 837,643 in 2009, more than tripling its increase. And the percentage of domestic trademark registration approval has increased from 82.6% in 2001 to 88.2% in 2009. Governments at all levels have also been strengthening the social awareness of respect for knowledge and creation and protection for intellectual property through all kinds of education and training. Every year, there are various kinds of promotion activities being held, such as the “Propaganda Week for Intellectual Property Protection” (held on April 26th) in memory of the “World Intellectual Property Day.” At the same time, there are over 40 intellectual property higher education institutions all over China, and more than 400 colleges have opened courses on intellectual property. What’s more, the fundamentals of intellectual property have also been integrated into the courses of primary and middle school. What’s worth special notice is that patent index was included in The 12th Five-Year Plan for the first time, which indicated that during “The 12th Five-Year Period” the amount of inventive patent possessed by every 10,000 people would be increased to 3.3.
In all, China’s accession to the WTO has not only boosted the Chinese economy into the second largest economy as well as the largest exporter in the world, but also has great influence upon IP development of China. It has not only promoted the perfection of China’s IP statute legal system; but more importantly, it has stimulated the motivation and potential of China’s IP trade and has greatly deepened Chinese people’s cognition and understanding of intellectual property. All these mark that China has fundamentally integrated itself into the world market system, trade system and competition system. On the other hand, with the fast development of the Chinese economy and the transformation of ways of knowledge dissemination, China’s international status has been greatly improved. China, as a responsible great power, has been gradually accepted and approved by the international society. The design of the world IP system needs, or even must have, voices and research achievements from China. While publicizing the national image, China needs to strengthen its international discursive power as well. China will not only joins the WTO, but also enter the discursive system of the world to obtain more discursive power and cultural identity so that IP can better serve the construction and development of the modernization of China.
[Foundation Project: This article is supported by the project foundation of Key Research Institute of Humanities and Social Sciences of Ministry of Education. Project Name: “The Process of Constructing the Principle of the ‘Government of Law’ during the Course of European Integration and Its Reference Significance for China” (08JJDGJW254).]
 

(Translated by Snow Li)

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