Understanding China, One Blog at a Time

An American in China

Innovation in China

Posted by w_thames_the_d on April 21, 2010

Emboldened, by, well I am not sure of what, but China has stated that its big ‘buy china’  media blitz will help stimulate demand for Chinese goods and this will translate to innovation within China. The problem is that for the last 400 years, innovation and China have been mutually exclusive terms, they just haven’t done it. So, they now are blocking international companies , so as to start innovation in China. The communist party has decided, come hell or high water, they will have indigenous innovation. Here is what Stanley Lubman has to say about it,

“Chinese government emphasis on giving priority to “indigenous innovation” in government procurement has generated rules that will limit foreign companies’ ability to transfer technology and to sell products to government entities. This represents a huge marketIn March 2010, the American Chamber of Commerce (AmCham) released the results of a recent survey of American companies: 28% of the 203 respondents reported that they are losing business because of the policy, and over half of the 49 technology companies surveyed foresaw that the new policy would affect their business

The policy has been applied to government procurement in a series of documents on “indigenous innovation” issued in recent years by the State Council, the Ministries of Foreign Trade (MOF) and Science and Technology (MOST) and the National Development and Reform Commission (NDRC).(reviewed in this PDF article).

To qualify as “indigenous innovation,” a product must be produced by an enterprise that owns the intellectual property (IP) in China; has a trademark owned by a Chinese company and is registered in China; embodies a high degree of innovation; and is certified by the Chinese National Certification Commission. Companies that have first developed IP outside China will apparently be excluded from the government procurement market in China.

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