China’s 14th five-year plan sets clear signals: Beijing will continue to decouple itself from the Western world, especially from the USA, and become more autonomous in many areas. Imports and supplies from abroad will be reduced, the domestic market strengthened and its own companies protected and promoted – also abroad.
The concept of dual circulation, the Chinese version of decoupling, aims to clearly distinguish between the two cycles of the domestic market and the global economy and to strengthen the former, domestic circulation. The substitution of imports by domestic products will further promote the growth of Chinese companies in their domestic market and finance their projects in other markets.
This development has far-reaching consequences for IP: China is strengthening its national IP regime. Chinese companies are filing more and more patents domestically, especially in the digital sector. The aim of this Great Wall of Patents is to make it more difficult or impossible for foreign competitors to enter the Chinese market. In addition, the registration of millions of Chinese trademarks is narrowing the national trademark space. Domestic Circulation leads to the Chinese market being more closed off by intellectual property.
Exporting German companies have to overcome the Great Wall, suppliers established in China have to stay behind it. A sustainable IP strategy that covers all assets – patents and trademarks as well as copyrights and trade secrets – is essential for this. In China it is now important to put one’s own IP portfolio to the test. The future competition with and in China is IP competition.