IP Fears Hinders West's Aid for Climate Change Mitigation in China

Over the past decade, China, a developing country with a population of 1.3 billion, has nurtured a booming economy, growing at an exponential rate. All of this has not been without a heavy cost however; China’s industrial activity has contributed immensely to the world’s total emissions of greenhouse gases. It has been projected that China will soon surpass the United States in terms greenhouse gas emissions. According to the International Energy Agency, between now and 2030, China will contribute two-fifths of the rise in carbon dioxide, the main greenhouse gas blamed for global warming.

Under the Kyoto Protocol, China and other developing countries do not have required limitations and goals to contain emissions. Recently, however, Gao Guangsheng, a senior Chinese official for climate change policy, indicated that China would like to take a more active role in climate change discussions. Gao stated that developing countries should take action, but only if developed countries assist by contributing funds and transferring technology. Under China’s proposal, developed countries would commit 1 percent of their economic worth to assist developing nations like China combat global warming. In addition, China would like to encourage a new international mechanism to implement “green” technology worldwide. China contends that their ability to reduce their greenhouse gas emissions is hindered by a lack of promise of suitable technology from rich western nations.

Why has the West been slow to provide these technologies? Officials and experts have explained that the West is worried about patent theft and sacrificed competitiveness. Others have contended that China’s proposal for technology transfer is too vague to negotiate. Gao’s response was that China’s proposal would address the West’s apprehensions with stronger protection for intellectual property.

I can understand why the West has been wary to implement their “green” technology in China. China has been notorious for violating intellectual property (IP) rights by copying anything ranging from designer clothing to technology. Chief among these copies was the Redberry, a cellular handset with the same “push-email” technology found in Research in Motion’s Blackberry device. Another example is Meizu’s M8 Mini One, which many consider to be a clone of Apple’s iPhone.

One solution for increased protection of IP, is to ensure that the Western company that owns the technology also wholly owns the subsidiary in China. This way, the company has much more control by creating “black boxes” in the production process, and only allowing certain employees access to trade secrets. The Chinese tend to dislike these sorts of arrangements however, because it is not very lucrative for them. Lydia Whyatt, managing director at venture capital investor Foursome Investments, states that the Chinese prefer joint ventures. The problem with joint ventures though, is that there can often be a lot of misunderstanding and the Western company can lose control of their patent. For example, the Chinese partner in a joint venture may think that they can take 100 percent of the profit in any country where the Western company doesn’t have a patent, like India, Malaysia, or Russia.

While China’s initiatives to become more involved in climate change discussions and ambitions to bring in “green” technology from the West should be commended, it seems as though one of China’s biggest hurdles at the moment is to prove to the West that it has the ability to provide much stronger enforcement of IP law and ultimately, much stronger protection of IP rights.

One Comment
  1. This must be a very frustrating situation for those Western governments that want to take environmental issues seriously and also encourage business. Perhaps one of the major problems with any new technology there is the law of the land. The Chinese government’s own website admits that a “modern intellectual property (IP) system was not established in China until the 1980s” (see http://english.gov.cn/2008-06/14/content_1016453.htm). This, in combination with the state’s special brand of authority, can easily lead to unfair allowances and rulings that the government may then justify through vague or unsupported reasoning. Looking at the link that Adrienne pointed out, the Redberry was put forth by a state-controlled company and promoted by a state-owned newspaper.

    In addition to the large amount of evidence of what would elsewhere be considered blatantly unfair practices specifically within the scope intellectual property, there is a general political distrust between parts of the West and China. Further backing this sentiment are the allegations over the last few years that the Chinese government was/is sending spies to Canada and the U.S., among others, in order to gain industrial trade secrets. I’m sure that even if Western companies were allowed to solely own and operate these green technology companies within China, they would still be at least a little wary to do so.

Comments are closed.