Proactive Measures Against US Intellectual Property War
Strategic Move to Block M&A of Chinese IT Firms with Algorithm Technology
[Asia Economy Beijing=Special Correspondent Jo Young-shin] Chinese President Xi Jinping has strongly instructed the protection of intellectual property rights, signaling preparations for a future intellectual property war with the United States.
President-elect Joe Biden has pledged during his campaign to protect American workers from unfair trade practices such as currency manipulation, illegal subsidies, and intellectual property theft.
The Chinese government's efforts to revise intellectual property-related laws are also seen as a preemptive move by the Chinese leadership to prevent mergers and acquisitions (M&A) of Chinese IT technology companies specializing in big data and algorithms.
According to China's state-run People's Daily and Xinhua News Agency on the 2nd, President Xi discussed intellectual property issues at the Communist Party Central Political Bureau collective study session held in Beijing the previous day.
At the meeting, President Xi emphasized, "The protection of intellectual property rights is related to the modernization of the national governance system and governance capacity, qualitative development, the happiness of the people’s lives, opening up to the outside world, and national security." He added, "To build a socialist modern country, we must comprehensively strengthen intellectual property protection work, promote the construction of a modern economic system, and push forward the establishment of a new development pattern."
President Xi stated, "Innovation is the primary driving force for development, and protecting intellectual property rights is protecting innovation," evaluating that "China is undergoing a qualitative improvement from a country that introduces intellectual property rights to a country that creates intellectual property rights."
He instructed that "China’s intellectual property protection should be well publicized to demonstrate the image of a civilized and responsible major country," and that cooperation on intellectual property rights should be strengthened with Belt and Road (land and maritime Silk Road) partner countries and regional nations. He also pointed out that intellectual property rights are directly linked to national security, instructing to "strengthen research and development and protection of core technologies related to national security and legally control the external transfer of intellectual property rights related to national security."
The Global Times evaluated this move as a measure to protect Chinese IT companies possessing algorithm technologies and other intellectual property rights.
Wang Feng, assistant professor at the AI Graduate School of Renmin University of China, explained, "This discussion on strengthening intellectual property rights is a continuation of the Export Control Law that came into effect on the 1st. The Export Control Law is fundamentally aimed not only at restricting the export of products but also at protecting intangible assets such as intellectual property rights."
He pointed out, "TikTok possesses algorithms built on vast data from Chinese users. If TikTok is acquired by a foreign entity or becomes a joint venture, enormous amounts of data could be leaked."
He added that the medical field, which holds genetic data of Chinese people, is also an area that should be protected by intellectual property rights.
Hu Chimu, senior researcher at the Synosteel Economic Research Institute, said, "The Trump administration has imposed sanctions on major Chinese IT companies such as Huawei, TikTok, and Tencent under the pretext of security. China also needs to revise laws like intellectual property rights to protect its domestic industries and companies, and the Export Control Law will become a weapon."
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