Ministry of Commerce official Wu Guohua, speaking at the Intellectual Property Rights (IPR) Summit in Beijing, has called for the creation of indigenous brands to ease China’s disturbing intellectual property trade deficit.
Wu further stated that it is crucial for China to bring into being indigenous brands, pointing to the large amounts spent on foreign intellectual property each year.
In spite of China’s surplus in commodity trade, a huge shortfall in services trade exists, with the number two factor of the services trade deficit last year being royalties and license fees, Wu added.
The services trade deficit increased last year by a factor of 1.6 on the 2008 figure, to stand at almost US$30 billion, with more than US$10 billion being paid to foreign companies in royalties and licensing fees.
Liu Feng, of the China Consumer Protection Foundation said low-end processing by many Chinese manufacturers resulted in thin profit margins, citing the Chinese produced vuvuzelas at the South Africa World Cup, which made on 1.5 US cents each for the Chinese manufacturers.
Zhang Yuncai, Secretary of the China Intellectual Property Society, called for a greater role by government in IPR protection, stating “Innovation cannot thrive unless there is a protective environment.”
Zhang added “In other countries, it is companies that promote IPR protection. But in China, due to low IPR literacy, a number of companies still have only a vague understanding of IPR protection. Therefore the government still have to play a major role.”