China strengthens IP protection system to create a favorable environment for foreign investments

This is a sponsored post by the Chinese Graphene Industry Association

In recent years, China has been working towards changing its IP protection system in order to encourage innovation and foreign collaboration. In the past, China has realized technology transfer mainly through acquisitions and establishing a large market for new technologies. Now the country is moving ahead with legislation to protect IP rights and eliminate unnecessary concerns in that field.

China has been putting a special emphasis on protecting IP by foreign-funded companies, creating a good environment for foreign capital investment and new businesses.


In 2020, a new set of laws, known as the “The Foreign Investment Law”, came into effect and became the basic foreign investment laws in China. The first measure to strengthen the protection of the legitimate rights and interests of foreign investment is to strengthen the protection of property rights of foreign-invested enterprises. The state protects the intellectual property rights of foreign investors and foreign-invested enterprises in accordance with the law, and encourage technical cooperation based on voluntary principles and commercial rules. Technical cooperation conditions shall be negotiated and determined by all parties involved in the investment, and administrative means shall not be used to force the transfer of technology. The government hopes that the new laws will demonstrate China’s greater protection of IP rights, and alleviate some of the current concerns. The new laws focus on foreign investors’ contributions, profits, assets, knowledge, license fees, IP infringements, legal responsibilities, and more.

The Chinese government reports that its IP system reform has achieved remarkable results, as it continues to optimize the business environment. According to a report released in 2022, foreign applicants obtained over 110,000 invention patent authorizations in China in 2021, with a 23% YoY growth, at the same time, the trademark registrations increased 5.2% to 194,000. Patent and Trademark applications by US-based enterprises increased 32.1% and 17.3%, respectively.

In 2021, the European Union Chamber of Commerce in China, in its "Business Confidence Survey 2021", stated that more than 50% of interviewed companies believe that China's intellectual property law enforcement is "good enough" and "very good", which is a positive change compared to previous surveys.

The graphene industry is a good example of China’s IP environment progress. Graphene is considered a strategic technology by many countries that aim to protect their local industries. Many companies have hesitated to cooperate with Chinese graphene developers, but this is now changing.

One example is a joint R&D project between an Australian university and a China-based company, launched in 2018. The company provided the funding for a scientific research on a specific graphene composite, while both could apply for patents – the Australian side applied for a relevant patent in Australia while the Chinese company applied for a patent in China. The research activity led to the establishment of a joint-venture company in which the Australian side holds a stake. Following three years of joint development, that specific project is entering the pilot-testing stage, where the Chinese side is providing the space, equipment and funds. Several end-user companies are interested in engaging with this joint-venture company for future market adoption.

To learn more about graphene research in China and possible collaboration opportunities, contact us to connect to the Chinese Graphene Industry Association.

Posted: Feb 23,2023 by Ron Mertens