Opinions
2022.10.12 19:11 GMT+8

We patently can't disconnect from the China market

Updated 2022.10.12 19:11 GMT+8
Keith Lamb

People visit the Fangtai Patent Tunnel with more than 8,000 national patent certificates, in Ningbo, east China's Zhejiang Province, August 18, 2022. /CFP

Editor's note: Keith Lamb is a University of Oxford graduate with a Master of Science in Contemporary Chinese Studies. His primary research interests are China's international relations and "socialism with Chinese characteristics." The article reflects the author's opinions and not necessarily the views of CGTN.

As of September 2022, over 3.15 million valid invention patents are held on the Chinese mainland, with more than 30 percent of them in strategic emerging industries such as new energy vehicles, digital creativity, and high-end manufacturing. This shouldn't be a surprise, since in 2019 China already overtook the U.S. in international patent applications.

With this news, the commonly held trope of China lacking creativity, either due to racism or systemic inferiority, does not hold true. Nonetheless, what does persist is the notion that China, without Western technology cannot progress, hence anti-China forces seek to stymie Chinese technology purchases.

Undoubtedly, the late Chinese leader Deng Xiaoping's reform and opening-up to the world, which led China to climb up the technological ladder and defeat extreme poverty, was an unprecedented success. Likewise, Western consumers improved their standards of living through the purchases of cheaper goods.

It was also a tremendous success for Western capital. The price of technology exchange, for access to China's labor and consumer markets, was not considered exorbitant. Western companies who profited handsomely could invest more in research and development (R&D) and the engine of the world economy was powered by this cooperation.

Today, those who question that Sino-U.S. cooperation isn't a win-win should be mindful of rising consumer prices as the world begins to fragment at the behest of the U.S. The World Trade Organization (WTO) now projects only 2.3 percent global growth for 2023.

Fragmentation will lead to the doubling up on R&D and the West will miss out on building upon Chinese inventiveness in the same way the Chinese have built on Western inventiveness. As the full power of China's innovation kicks in, the need for cooperation will become even more pressing.

The U.S.-led West is going the wrong way. Ironically, while anti-China forces grumble that "China only reached where it is today due to Western cooperation," they are simultaneously, with various Acts of Congress, such as the CHIPS and Science Act, cutting off this cooperation that goes both ways. Apparently, what they "blame" for China's successful strategy they do not follow themselves.

This is due to a "wanting it all" win-lose attitude where cooperation with China is meant to be one where no advantages can accrue to China. Such an attitude can't be publicly advertised; hence inequality has been justified through the aforementioned racist or anti-system explanations.

Yet, China and its people appear just like the West to be more than capable. For example, China is already manufacturing 14-nanometer chips, which the U.S. seeks to negate, and China has raced ahead in numerous technological fields. Considering China's huge market, its massive talent pool, as well as private industry and government investment, this shouldn't come as a surprise.

Technicians work in a workshop of Wuhan Xinxin Semiconductor Manufacturing Co., Ltd in Wuhan Donghu New Technological Development Zone in Wuhan, capital of central China's Hubei Province, February 14, 2020. /Xinhua

With China shifting away from being a manufacturer for others to a developer of cutting-edge technology, the danger lies not only that there will be wastage in duplicating expensive R&D, but that technological innovation will stagnate. Western industries will miss out on purchasing high-tech equipment from China and productivity will fall behind. Additionally, the Chinese consumer and labor market will be cut off leading to a decrease in profits and access to talent needed to compete in R&D.

With this case laid out, the logical option for how Western governments engage with China is to follow China's example and remain open to the world. By doing so, the West can access technology, markets, and remain competitive.

The claim will go up that China, as well as other developing states have certain advantages in the WTO when it comes to technical assistance and trade that developed states do not. Nonetheless, the rules of the WTO were mainly set by the rich countries to gain access to developing markets through incentives such as technology transfer.

One who argues against WTO rules, first does not recognize the benefits that developed countries gain by accessing developing markets, they believe in the above-mentioned win-lose mentality, and would prefer a status quo of an unequal world order where developing states can never access the technology needed for balanced global development.

The second hackneyed charge that gets addressed is that China doesn't respect intellectual property (IP) and so it's pointless conducting business with China. This argument disregards the developmental timeframe where developing countries, especially in their early stages, tend to be copiers in the manufacturing process due to being behind the technological curve. This can lead to weaker IP enforcement.

Meanwhile, as innovation becomes widespread so does IP enforcement. This is the case in China. In 2022 China rose to 11th place in the Global Innovation Index, which means it ranks high with developed states. This has come about due to stronger IP protection.

Accordingly due to China's developmental imperatives, it attaches great significance to building an innovation ecosystem and protecting IP as laid out in its 15-year plan to build the country into an IP powerhouse by 2035. China's National Intellectual Property Administration already has 57 IP protection centers and China is implementing bilateral agreements, such as the "2019 EU-China geographical indications agreement" to curb counterfeits on trademarks.

China remains a cooperative partner that remains open to the world, but it will not be bullied into a subservient role. As such, those who believe in win-lose outcomes must be cognizant not to shoot themselves in the foot by disconnecting from the China market.

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