A study on the effects of intellectual property policies in China: Evidence from China’s ‘IP demonstration city’ program

Abstract

The impact of IP policies (IPPs) in China has attracted much attention, especially in the context of an upsurge in patent applications and grants. This chapter introduces and analyzes the IP Demonstration City (IPDC) Program in China. Following interviews with government officers from local IP offices in various IPDCs, we have identified the effects of the IPDC Program, which include an increase in IP creation, the growth of IP-related industries, the improvement of both companies’ IP awareness and the governments’ IP administrative system, and potentially an increase in the inflow of foreign direct investment. However, at the same time we have found that the effect of the program within many provinces appears to be relatively limited, although it may be stronger in less-developed provinces. Furthermore, the marginal economic return of the current IPDC Program decreases as more IPDCs are introduced, although in the long term a greater number of IPDCs may eventually generate more general nationwide economic returns. In order to understand how different localities implement and benefit from central-level IP-conditioned government programs in China, we have conducted a brief case study of the cities of Changji and Quanzhou and analyzed the policies implemented by local governments to achieve and maintain IPDC status.