IPR Daily
During the Fifth Plenary Session of the 12th National People's Congress,
China's top legislature, Huang Jianping, a deputy from South China's
Guangdong province, said the robust growth of virtual economy has taken a
toll on bricks-and-mortar enterprises. Beijing News commented on
Monday:
Huang, who is also the chairman of Guangdong Wonderful
Ceramics Co Ltd, has good reason to fire away at the dark side of the
internet-driven economy. Like many manufacturing veterans, he is
infuriated by the fact that many online retailers, despite their blatant
infringements of the intellectual property rights of other
manufacturers, are not held accountable due to the difficulty in holding
them to account.
In fact, Jack Ma, founder of the e-commerce
giant Alibaba Group, recently commented on the intellectual property
rights issue, saying counterfeiting should be dealt with in the way
drunken driving has been handled. In other words, the root cause of the
unruly counterfeiting is that intellectual property is not under proper
protection.
Countries at the early stages of industrialization
are tempted to emulate the success of industrial leaders. In China's
case, when the reform and opening-up policy was launched in the late
1970s, resources were scarce and most citizens could not afford quality
products. That explains why many copycats would focus on manufacturing
affordable goods even at the risk of violating other companies'
intellectual property rights.
Although the days of scarcity are
in the past, the protection of intellectual property rights has made
limited progress as enterprises are less motivated to pursue
innovations. Being an industrial trailblazer, to some extent, means
higher costs but not necessarily more gains because copycats can achieve
more success simply by "improving" on their pioneering products.
Some
enterprises put profitability in front of legality, especially when the
production cost keeps rising these days. And even if they are caught
the legal consequences of their actions are limited.
The truth
is that amid the country's economic transition many primitive Chinese
manufacturers are losing in the competition with their Southeast Asian
counterparts, which have become more attractive to foreign investors
that favor low-cost labor. It is lackluster innovation that has led to
excessive capacity in China and dwindling profits in manufacturing, not
the internet economy.
Source: IPR Daily ,China Daily
Editor:Royal