(China Daily)
Updated: 2007-04-25 06:57

Chinese enterprises have reason to worry about the adverse impact that Western countries' tough stance on protecting intellectual property rights (IPRs) may exert on their bottom lines.

Intensified trade disputes over IPR-related issues will more than likely make a dent in the profits of many domestic exporters.

However, for Chinese enterprises to succeed in the era of the knowledge-based economy, the more pressing task is to substantially boost their own development of intellectual property.

In the long run, IPR-based competitiveness will replace China's current comparative advantage of low labor costs. IPRs will beome the major factor behind Chinese enterprises' survival in both domestic and international markets.

This is a key message senior Chinese officials were trying to drive home at the China High-Level Forum on Intellectual Property Right Protection held yesterday in Beijing.

As a condition for entry into the World Trade Organization, since the year 2000, China has been carrying out a thorough revision of laws and regulations relating to IPR protection to ensure they comply with international conventions.

Yet, in spite of these and other measures by China to step up IPR protection, the United States launched two cases against China at the WTO early this month. The US claims that China is not doing enough to punish illegal copiers of films and music and that Chinese restrictions on entertainment imports violate trade rules.

Such US complaints smack of protectionism as its policymakers drag their feet on taking painful but necessary domestic action to address ballooning trade and budget deficits.

The Chinese government should actively respond to the cases to avoid other countries' abuse of IPR as a disguise for protectionism.

Putting aside the possible impact on exports such cases can cause, Chinese enterprises also have a stake in strengthened IPR protection. It is a precondition for them to invest more in sharpening their knowledge-based competitive edges.

It has taken years for developed countries to raise their IPR protection to the current level. As a developing country, China still has a long way to go. But that does not mean Chinese enterprises can afford to wait. They should do their most to develop their own intellectual property.

(China Daily 04/25/2007 page10)