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The many sides to intellectual property protection in China

There have been a wide variety of intellectual property concerns for companies doing business in China. Despite such concerns, China does appear to be taking steps to improve its reputation. Also, many American companies are acknowledging extensive growth in revenues due to doing business there.

As one European periodical notes, the Chinese market is too big for businesses to ignore. Besides having over a billion people, China’s economic growth has been extraordinary. This includes increasing revenues in the scientific and technological industries due to a variety of state-run initiatives.

Steps China has taken in addressing intellectual property concerns

During the China International Import Expo (CIEE), President Xi Jinping emphasized improving its country’s “Intellectual Property framework.” This meant implementing a “punitive compensation system” to punish offenders.

The Chinese government also demonstrated its willingness to protect for goods and services presented at the CIEE. At least one consultant viewed this as a positive step.

Challenges in doing business in China

There is a requirement to form joint ventures for companies attempting to start a business in China. This practice allows for Chinese interests to take advantage of technology created by its counterparts. And such interests also have a long reach. China has the power to buyout companies doing business outside of its country as well. This makes it more difficult for companies to avoid doing business with China.

Many businesses acknowledge that problems continue to exist. Trade tensions will continue to put a damper on the Chinese economy. For example, despite China’s large consumption of machinery tools, some companies are reluctant to develop machinery inside of China.

Still, if China does follow through with its promises to provide increased intellectual property protection, such reluctance may gradually disappear. Doing business in China will then be seen as a positive step.

It will continue to be necessary for businesses to receive sound legal advice and counsel regarding intellectual property matters when doing business in China. Even under the best of circumstances, businesses still need to understand Chinese laws and customs when trying to protect their trade secret information.

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