Accession to the World Trade Organization in Dissertation

Excerpt from Dissertation :

accession to the World Trade Organization in 2001, China's laws regarding intellectual property rights were largely weak and ineffective, even though there were some laws on the books that were designed to protect these rights. Much of this ineffectiveness is attributed to the state-controlled economy that was in place that made observation and respect for domestic and international intellectual property rights dispensable. In its efforts to accede to the World Trade Organization and in response to pressure from the international community in general and the United States and European Union in particular, China has undertaken a number of significant reforms of its domestic and international regulatory framework that have been intended to harmonize its laws with those of the international community. While some observers continue to maintain that these efforts fall short of complete reform, most authorities agree that China has made significant strides in its efforts to make meaningful reforms to its intellectual property rights framework. This study examines China's intellectual property laws prior to and following its accession to the World Trade Organization in 2001, and important findings and a summary of the research are presented in the conclusion.

An Analysis of the Evolution of Intellectual Property Laws in China following Accession to the World Trade Organization

Introduction

The 21st century has been called the "Century of Asia," and most authorities agree that China will lead the way in terms of economic growth and political influence. China's economic performance in recent years appears to bear these predictions out, but a number of challenges remain that must be resolved if China is to completely achieve its economic development goals. Among these challenges is the need to ensure intellectual property rights are protected by the nation's legal system. Although a number of significant reforms have been implemented following China's accession to the World Trade Organization in 2001, infringements of intellectual property rights are still commonplace and these infringements continue to hamper foreign investment and domestic research and development efforts. To gain additional insights into what has been done and what remains to be done in this area, this study provides a review of the relevant peer-reviewed, scholarly as well as nongovernmental organizational literature concerning intellectual property rights in China and how these have changed since the nation's accession to the World Trade Organization. A summary of the research and important findings are presented in the conclusion.

Review and Discussion

Background and Overview

By most accounts, things are changing for the better in China, but many observers suggest the government still has a long way to go in harmonizing its intellectual property laws. Nevertheless, the main consensus that emerges from the research is reflected in Long's observation that, "The People's Republic of China has made considerable progress in developing a strong intellectual property rights regime since the early 1970s. The leadership of the Chinese Communist Party has publicly acknowledged the need to develop a "knowledge economy" based on a strong system of intellectual property rights" (2000, p. 11). The impressive economic development that has taken place in China in recent years is also well documented (Bhalla, 2008; Lo & Everett, 2001; Chang, 2004; Leppman, 2005; Li, 2003; Gamer, 2005). A great deal of this economic development has been fueled in large part by growing investments from the West, especially the United States and the European Union (Chua, 2006). Generally speaking, though, China remains in a state of transition from its previous state-controlled system of administration to one that embraces respect for the rule of law (Ghadar, 2006; Liao, 1999; Kennedy, 2000).

To facilitate the transition from state-controlled economy to one that is more characteristic of a Western-style free market version, the Chinese judicial system has undergone a series of reforms (An, 2009), but the process has been slow and foreign investors frequently turn to alternative dispute resolution procedures to resolve disputes concerning intellectual property rights as a result (Chua, 2006). Since the early 1990s, China has implemented a broad array of initiative to reform its judicial system as well as to increase the transparency of its judicial proceedings. According to Chua, "Many foreign investors bring valuable trademarks, designs, or business processes into China with the hope of applying the same in conjunction with a lower-cost business proposition. Nevertheless, the protection of intellectual property rights is an issue that remains to be resolved satisfactorily, particularly as infringements continue to be widespread" (2006, p. 134). Other authorities are more optimistic about China's efforts to reform its intellectual property laws, some even verging on the Panglossian in their glowing reports and descriptions concerning the significant steps that have been taken by the Chinese government in recent years, while others are more reserved in their assessments, and these issues are discussed further below.

Intellectual Property Laws in China Prior to 2001

During the 1980s, there was an initial move taking place in China that revised its former views about intellectual property as being social goods there were subject to state control to a limited acceptance that intellectual creations were the property of their creators in line with Western-based views (Economy & Oksenberg, 1999). This initial move was followed by more significant legal reforms that were largely focused on facilitating China's accession to the World Trade Organization. To this end, according to Ostry, Alexandroff and Gomez, in an effort to gain membership in the World Trade Organization, China implemented a number of initiatives concerning its intellectual property laws. These authorities report that, "A key element in China's accession to the WTO relates to the transparency of laws, regulations and other rules related to trade and investment" (Ostry et al., 2003, p. 131).

Among other laws passed during this period, the Chinese Administrative Litigation Law (ALL) of 1990 assigned power to the courts to review the legality of administrative acts such as the imposition of fines; the denial of business licenses; and the restriction of property rights; in addition, the ALL provisions allowed challenges against individual Chinese officials who were suspected of abusing their power to elicit bribes; however, other provisions of ALL did not permit rule-making, the setting of relevant standards or other administrative activities that would facilitate most procedural activities in the country (Ostry et al. 2003). Notwithstanding these limitations, other reforms followed by ALL initiative include a wide range of administrative statutes enacted during the 1990s (Ostry et al. 2003). Here again, though, this plethora of regulatory guidance was well-intentioned but did little to contribute to the transparency of the Chinese legal system (Ostry et al. 2003). According to these authorities, "While opening up an increasing number of channels for complaint, none of these statutes deals with the heart of the transparency conditions which are based on full information and a uniform administrative procedures regime grounded in the right of an individual to challenge a government official" (Ostry et al. 2003, p. 132).

By and large, though, the overwhelming majority of these efforts were directed at facilitating China's accession to the World Trade Organization, a step deemed essential by the Chinese leadership to furthering the country's economic development goals for the 21st century. In this regard, Alford describes the contentious nature of the fundamental constraints involved in protecting intellectual property rights in China during this period:

If the purpose of U.S. policy towards the Peoples Republic of China concerning intellectual property is to secure meaningful protection for American property interests, it is necessary, therefore, first to understand why such protection is no more readily available for the Chinese & #8230; [T]he most important factor in explaining the late appearance and relative insignificance of the idea of intellectual property in the Chinese world lies in what, for lack of a better term, we might describe as its political culture, and especially in the central importance of the state, for purposes of legitimation and power, of controlling the flow of ideas. A system of state determination of which ideas may or may not be disseminated is fundamentally incompatible with one of strong intellectual property rights in which individuals have the authority to determine how expressions of their ideas may be used and ready access to private legal remedies to vindicate such rights. (Alford, 1993, p. 97)

The winds of political change have swept through the Chinese leadership in recent years, though, and the Long March veterans have been increasingly being replaced with forward-thinking leaders who recognize that in order to join the international community in meaningful ways, China's legal system must protect intellectual property in ways that conform to international standards (Ostry et al. 2003). In this regard, Ostrey and his colleagues note that, "Of course, political cultures change and the process of economic reform in China has already affected the pace and direction of that change. So, of course, will full and effective integration into the global economy through membership in international institutions such as the WTO" (2003, p. 132).

Pursuant to these goals, beginning in 1993, China started establishing separate courts within the People's Court system to deal with intellectual property rights…

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