The Chief Economist of the International Monetary Fund (IMF), Maury Obstfeld, has said that a flexible intellectual property regime in China could be key to resolving trade tensions with the U.S.
Obstfeld recently told journalists; “One of the big issues in the trade disputes between China and trading partners is this area of intellectual property. And reforming that regime is a big to-do for the global multilateral order.”
The sanctions the U.S. want to impose on Chinese goods - in the form of billion-dollar tariffs - are the result of demands that China reforms its intellectual property practices to avoid counterfeit sales of IP protected products.
Obstfeld also explained that due to China’s increasing production of new technology, which requires patenting and trademarking, continuing conflict between the U.S. and China could destabilise the global economy.
Obstfeld argued there is a need for China to open itself up to foreign markets and join the global IP landscape. While China overtaking the U.S. economically is a forgone conclusion, entering into negotiations with the U.S. and taking a more holistic approach to global markets, could ultimately benefit China.
Obstfeld will be stepping down as Chief Economist at the end of the month to be replaced by Harvard economist, Gita Gopinath.
East vs West
There has been a long-standing intellectual property feud between the U.S. and China. A 2011 report by the U.S. International Trade Commission estimated U.S. IP-intensive firms lost $48 billion in 2009 because of Chinese infringements.
In a recent altercation, China placed tariffs on an additional $60bn of imports from the U.S. in retaliation against $200bn of new trade sanctions on Chinese goods announced by Donald Trump. This is problematic for China because its annual imports from the US total only $130bn, while its exports to the US total more than $500bn.
China’s global IP origins
Since opening its economy to foreign markets in the late 1970s, quality of life has improved in China. Yet many believe there is still plenty of room for China to grow in the global economy. Considering this growth in relation to IP, more data on patents and trademarks will be required for stakeholders to navigate the emerging IP landscape.
With the latest report from the World Intellectual Property Organisation (WIPO) predicting an increase in demand for IP tools, and the observation that the U.S. Supreme Court in 2017 heard more IP disputes than any other field, accuracy of IP data will be vital to professionals working around this emerging aspect of industry.