Intellectual Property Rights in China. Zhenqing Zhang
addition to the economic loss caused by copyright piracy and the challenges posed by the foreign copyright industry, Chinese copyright holders must work within the shackles imposed by the Chinese government. Last but not least, my findings suggest that the majority of the Chinese public does not possess a sufficient level of sympathy for the IPR norm despite the government’s repeated advocacy campaigns. Except for some social elites, the majority of the Chinese mass public views the Chinese government’s concession on IPR negotiations as betraying China’s national interests; like some local officials, they tolerate or even praise IPR infringement as a patriotic act against what they call “foreign economic invasion.” Copyright infringers in China not only benefit from an extremely high economic return from piracy but are also backed by consumers who have little sympathy for copyright laws. Only under some rare circumstances could the Chinese copyright bureaucracy win the support of the mass public and successfully enforce copyright norms.
Chapters 5 and 6 focus on the third subcategory of IPR norms—namely, trademark. Specifically, Chapter 5 unravels the close relationship between the evolution of the Chinese trademark regime and its gradual acceptance of the legitimacy of the market economy. I argue that the Chinese trademark holders can advance their agenda with the support of their sympathizers within the Chinese government even though China remains an authoritarian country. I also identify how the U.S.-China IPR negotiation in the 1990s and China’s WTO entry negotiation in the late 1990s provided much-needed insights for the Chinese trademark professionals in revising the country’s trademark legislation. This ideational change informed Chinese trademark legislation even though trademark was not a salient issue in the negotiation agenda with the developed countries.
Chapter 6 discusses the implementation of Chinese trademark policy. I found varying levels of sympathy for trademarks among different types of business actors in China: first, foreign companies and elite Chinese private companies strongly adhere to trademark protection as an important means of safeguarding their competitiveness. Second, although state-owned companies occupy important positions on the ranking of trademark values in China, the value of their brands lies in their state-sponsored profits rather than in market competition. Therefore, they merely pay lip service to the norm of trademark. Third, millions of small and medium-sized private enterprises are the major contributors to China’s position as the world’s leading manufacturing power, known as the “world’s factory,” but their manufactured goods are not independent brands. They either act as the processors of the products already designed by foreign trademark owners or rely on counterfeiting to take a free ride on the good name of established brands. I also trace the mechanism that contributes to the varying levels of trademark sympathy. My findings suggest that different business actors’ attitudes toward trademark should be attributed to their differing strategies in building brand recognition and applying brands in their market competition. Although China has installed a complete set of quality control policies since the late 1970s, the policies have been implemented unevenly and resulted in different outcomes among different sets of Chinese business community: foreign enterprises and elite private enterprises comply with the quality control regulations to ensure the quality of their products, but most small and medium-sized private enterprises regard profits rather than quality as their first priority. Moreover, due to the immature nature of the Chinese market mechanism, Chinese domestic enterprises, with the exception of some elite ones, mainly rely on unfair market competition practice, such as price warfare or government connections, to gain consumer recognition. The above mechanism contributes to differentiated levels of brand value among different sets of business actors, which, in turn, contributes to their different attitudes toward trademark. Finally, Chinese consumers’ attitudes toward trademark play a significant role as well: my findings suggest that, in purchasing branded products, most Chinese consumers care more about commodity price and quality rather than the authenticity of brands. Chinese consumers’ indifference to trademark creates a market for counterfeit goods to grow and survive rounds of government-organized anticounterfeit campaigns.
My conclusion summarizes the theoretical argument and empirical findings. I also offer a series of policy recommendations. I situate my study in the broader context of the interaction between the global political economy and China’s domestic political and economic reforms. The conclusion argues that the Chinese government does not enforce IPR just for the sake of it. Their real purpose is to promote the Chinese economy from the early industrialization stage, relying on cheap labor and natural resources, to a knowledge-based, innovative economy. The IPR norm does not enter a vacuum when it enters the country. Instead of following an IPR policy formulated by the central government in a concerted manner, various state and social actors have chosen parts of the IPR norm they consider useful to advance their own political and economic agendas. It is fair to say that there are various IPR policies, rather than one monolithic IPR policy, at work. The outcome of IPR policy implementation is dependent on whether a social consensus can be built to align the interests of different actors—namely, foreign business, domestic society, and the Chinese state. The more successfully that consensus is built, the better the IPR norm is complied with; the more conflicted the relationship among the three is, the less likely it is that the IPR norm will be implemented. As an unintended consequence, the compliance with IPR norms yields deeper implications that extend beyond the realm of IPR. Typically regarded as an important means for industrial upgrades, the growth of IPR in China has also awakened various societal actors’ awareness of their own economic and moral rights of their intellectual creation. While the formation of social consensus is essential for high-quality IPR enforcement in the short run, the building of a mature market economy based on more thorough political reform is the essential means to combat IPR theft in China.
Methods and Fieldwork
Since this book emphasizes understanding an interpretive project—that is, how a Western-originated international norm has taken root in China—the data collected for this book are mostly qualitative. The empirical data in this book were gathered from multiple research trips across the Pacific Ocean between May 2007 and January 2014. When I was not in China, I maintained close contact with my interviewees. As my book project proceeded along, I updated the empirical data through emails, phone and Skype conversations, and online chats. Between 2007 and 2010, my field research was conducted in seven provinces or municipalities in China: Anhui, Beijing, Jiangsu, Shanghai, Guangdong, Fujian, and Hong Kong. After 2010, I expanded my fieldwork sites to two inland provinces in China: Shaanxi and Henan.
The fieldwork sites were not randomly chosen. My fieldwork sites covered major geographical regions of China. They varied from the affluent coastal provinces and municipalities (Guangdong, Jiangsu, Shanghai, and Fujian) to the less affluent inland provinces (Anhui, Henan, and Shaanxi), from Beijing, the Chinese capital right “under the emperor’s feet,” to Hong Kong, the Special Administrative Region (SAR) that is still heavily influenced by its British colonial legacy. This large and heterogeneous sample enables me to develop a comprehensive general picture of the making and implementation of Chinese IPR policy that represents the national pattern. In my original research design, I planned to examine regional variation of support for piracy and counterfeiting and variation by type of products and industry. Findings from my field research, however, demonstrate a much more sophisticated situation. That is, even in the more economically affluent provinces, IPR enforcement can be rendered less effective if the enforcement bureaucracy cannot successfully cooperate with the IPR holders.31 Even in the less economically affluent provinces, IPR enforcement can reap an effective outcome if the local state can be persuaded that protecting IPR is in their interests.32
The empirical data gathered from fieldwork consist of three major components: interviews, archival research, and participant observations. To determine the attitudes of people with different relationships with IPR, I conducted 152 in-depth interviews during my fieldwork trips, including 99 formal interviews and 53 informal ones. Covering all administrative levels of China, the formal interviews were conducted with government officials ranging from one former vice chair of the Chinese National People’s Congress and three ministerial-level officials involved