The world is awed by China's rapid and robust growth in IP. But few recognize the primary driving force beyond this phenomenon.
Recently, the China National Intellectual Property Administration (CNIPA) released yearly statistics on IP in its first-quarter press conference of 2021 in Beijing. All major statistics met expectations in 2020, indicating another step upward for China's IP system. 
Summary of the Key Data
According to the statistics released:
During the period 2016-2020, the total amount of China's IP pledge reached 709.5 billion yuan (about 109.8 billion dollars), double the amount of 2011-2015. The added value of patent-intensive industries reached 11.5 trillion yuan (about 1.78 trillion dollars).
In 2020, China's patent and trademark pledge financing projects reached 12,039, an increase of 43.8% year-on-year; the total amount of pledge financing reached 218 billion yuan (about 33.7 billion dollars), an increase of 43.9% year-on-year.
In 2020, the structure of Chinese
domestic invention patents' quality had improved. 281,000 invention
patents maintained for more than ten years, accounting for 12.3% of the
total, an increase of 1.0% from the previous year.
From January to November 2020, China's exports of intellectual property royalties amounted to 7.47 billion dollars, a year-on-year increase of 24.2%, achieving the most significant growth in 2016-2020.
The value of Chinese IP has increased a lot. This change can tell from IP owners' willingness to maintain patents and the possibility of using IP as collateral for a loan, i.e., IP pledge.
Also, recently China has stopped funding applications for intellectual property rights. It now focuses on strengthening support for subsequent commercialization, application, administrative protection, and public services.
Then the question comes to, what brings China's IP system to this new height?
Planned Economy Thinking
To answer this question, we cannot underestimate the influence of planned economy thinking. Following were the targets set by China's 2014-2020 plan of guidance in the field of IP (excerpted from chart 4 in the book "Innovation's Crouching Tiger").
In March 2021, CNIPA just released the new plan. But looking retrospectively at this 2014-2020 plan reveals the secret driving force for China's IP solid growth.
Are you surprised to see such concrete targets?
These indices serve as government officials' Key Performance Indicators (KPIs) to evaluate their performance in each planning cycle. As pointed out in the book "Innovation's Crouching Tiger," according to the national targets, the governments at the provincial and municipal levels plan their corresponding sub-targets and allocate resources to reach them.
This mechanism explains why all significant targets can meet expectations in 2020, bringing the Chinese IP system to a new height. Such solid growth is also creating numerous investment opportunities by commercializing intellectual property.
More strategy for IP-related investment in China
Author：Jili Chung, Josie Chen, and Jonas Hou