TIPS^®  Taiwan Intellectual Property Special

Problem Ahead: China Becomes R&D Magnet

According to China’s Ministry of Commerce, the total number of foreign invested R&D centers in China has increased from 200 to 750 in the past 4 years. Moreover, a survey published by the United Nations Conference on Trade and Development shows that China was the most frequently cited location for R&D expansion, far ahead of U.S. and India.

The Wall Street Journal featured an article on March 14, describing it has become a trend that multinational companies, drawn by China’s huge and inexpensive talent pool, are pouring money into the research and development in China, and such a trend promises to broaden the countries’ big role in the global economy. Despite the expanding in the scope of the R&D efforts, China’s growth as a global R&D hub faces some constraints. Among them is the country’s weak protection of intellectual property rights. This problem has encouraged some foreign companies to keep their cutting edge development out of China, in the fear of risking their trade secrets.