New incentives for Foreign R&D in China. A feeling of déjà vu.

While all eyes are now on the outward signs of China’s economic reopening, the Chinese Central authorities are redoubling their efforts for the installation of foreign R&D centers on its territory.

On January 18, the General Office of the State Council issued a notice on several measures to further encourage foreign investment in the establishment of R & D centers. It says that: “Foreign-invested R & D centers are an important part of China’s science and technology innovation system. (…) In order to accelerate the implementation of the innovation-driven development strategy (创新驱动发展战略) and better serve the construction of a new development environment (构建新发展格局) in the country we have formulated the following measures…” (See below its summary in English and full text in Chinese).

Is it necessary to remind that we are in the midst of a global battle for technological supremacy being waged by all the major industrial and commercial powers, foremost among them China?

Isn’t there a feeling of déjà vu in this quest for the most prized foreign technologies? And how can we understand Beijing’s stated objective of “technological self-reliance” with a renewed policy toward foreign owned companies’ assets?

This does not seem to worry many economists who persist in seeing in the so-called miracle of Chinese industrial, scientific and technological progress, a candid learning process that should be maintained by encouraging China to open up even more to the rest of the world as if we had no lessons to learn from the last 40 years of Chinese development.

In fact, the measures announced are not strictly speaking “measures” but proposals for the attention of foreign companies and the international scientific community. The multiplication of performing action verbs (promote, reinforce…) mainly reflects the political will of the central authorities to achieve a result in line with its strategic objectives as well as an insufficient level of preparation and conditions to guarantee legal protection enforcement in a constantly changing regulatory environment. Moreover, wanting to attract innovation and, at the same time, calling for a reinforcement of the respect for intellectual property can appear as a strange way of devising a “high quality” business environment in the country.

 Structure of the State Council Notice:

A/To Support scientific and technological innovation

• To optimize science and technology innovation services
• To encourage the development of basic research
• To promote collaborative innovation between industry, academia and research (进产学研协同创新)*
• To support the establishment of open innovation platforms (开放式创新平台)
• To improve financial support for scientific and technological innovation (科技创新金融支持)
• To smooth the channels for participating in government projects

B/ To facilitate research and development

• To support the cross-border flow of R&D data in accordance with the law (研发数据依法跨境流动)
• To optimize the foreign transfer of intellectual property rights and technology import and export management process (知识产权对外转让和技术进出口管理流程)
• To optimize the customs clearance and supervision process of research materials

C/ To encourage the introduction of overseas talent

• To encourage overseas talents to declare professional titles
• to strengthen overseas talent incentives and funding (奖励资助)
• to promote the facilitation of cross-border funds received and paid by overseas talent (跨境资金收付

D/ To enhance the level of intellectual property protection

• To accelerate the improvement for the protection of trade secrets ruling system (完善商业秘密保护规则体系)
• To strengthen the construction of intellectual property protection center. 知(识产权保护中心)
• To improve the level of intellectual property rights enforcement (提高知识产权执法水平)

 

Full text in Chinese: http://www.gov.cn/zhengce/content/2023-01/18/content_5737692.htm

 

* In Chinese, some areas where we could pay more attention.