Sino-US IP cooperation drives cross-border innovation and mutual economic growth

Editor's note: This article was written by Tang Jie and Zhou Mi of the Chinese Academy of International Trade and Economic Cooperation. It reflects the authors' opinions and not necessarily the views of CGTN, and has been translated from Chinese and edited for brevity and clarity.

In today's era marked by an increasingly sophisticated global division of labor, the complementarity between China and the US in services trade has become a key force in maintaining the economic stability of both countries. The US secures considerable returns through the high value-added exports involved in services trade, while China accelerates industrial upgrading and technological cooperation through market openness. The partnership between these two countries highlights the mutually beneficial nature of China-US economic and trade relations. Their intellectual property (IP) cooperation is a key embodiment of the flourishing bilateral services trade.

Growth in IP fees demonstrates how the Chinese and US economies empower each other

IP royalties represent a major means for technology owners to commercialize the results of their early intellectual investments. According to data released by the US Department of Commerce, the US generated $144.5 billion in revenue from IP royalties in 2024, far exceeding that of any other country and constituting one of its primary sources of services trade revenue. Specifically, the Chinese market contributed significantly, accounting for one-fifth of the US's total royalty income from the Asia-Pacific region. US income from IP royalties paid by China surged from $440 million in 2001 to $7.8 billion in 2024. While the US sits at the top of the value chain due to its innovation capabilities, China offers fertile ground for technological implementation thanks to its diverse application scenarios and massive market demands. These facts demonstrate that within the framework of services trade, the flow of technology is not a confrontation between "theft" and "handouts" but a resonance between "supply" and "demand".

IP cooperation is also driving industrial upgrading in both China and the US

For the US, continuous royalty inflows have become a core engine propelling the evolution of its service economy. US tech giants, represented by Apple, Qualcomm, and Microsoft, reap substantial returns from licensing technologies in China. Meanwhile, China's vast market and user base also help these companies rapidly optimize related technologies, thus strengthening the global layout of US services trade. For China, royalty payments serve not only as the "tuition fees" of technological catch-up but also as "catalysts" for industrial and service upgrading. By introducing US technologies, Chinese manufacturing can better integrate into global value chains.

The reciprocity of China-US IP cooperation also evident in joint efforts to shape global trade rules

Currently, digital services account for 15 percent of global trade, a figure the WTO projects will rise to 37.2 percentage by 2040. Against this backdrop, the interaction between China and the US in areas such as cross-border data flows and digital copyright protection has become particularly crucial. Their coordinated innovation under frameworks like the Patent Cooperation Treaty, along with their collaborative initiatives to establish ethical standards for artificial intelligence, is serving as a model for developing trade rules in the digital age. China's Hainan Free Trade Port, a pilot zone for cross-border data flow, will also present new opportunities for US cloud computing enterprises.

Surely, China-US cooperation on IP is not without its challenges. Some US politicians have sought to stigmatize technological collaboration as "forced transfer" and have attempted to sever industry chains through unilateral measures such as tariff hikes and investment restrictions. In order to deepen IP cooperation, it is critical to move beyond the zero-sum mindset of "one country's gain comes at the other's expense". China needs to further enhance its IP protection ecosystem, cultivate high-value domestic patents, and strike a dynamic balance between technology imports and indigenous innovation. By contrast, the US should recognize China's role in driving technological iteration and transform its technological edge into sustainable cooperative dividends. It is essential to empower both China and the US with IP cooperation and deliver shared benefits to the world.