Determinants of Foreign Patents in China

This study examines patterns of foreign patents and their determinants in China from 1985 to 1999. It reveals that China's patent system is not significantly different from those in most countries, though it is more oriented towards promoting technology diffusion rather than protecting inventors' rights. Since China patent law came into force in 1985, foreign patents, as well as China's domestic patents have been growing rapidly. The study also confirms the substantial differences between foreign patents in China and China's domestic patents revealed by previous studies. First, foreign patents primarily fall within the category of inventions, whereas utility models and industrial designs consist of the majority of Chinese domestic patents. Second, foreign patents in China are largely awarded to organizations, while individuals comprise the majority of Chinese domestic patentees. Third, foreign patents in China concentrate in a small number of advanced and Newly Industrialized Economies (NIEs). In addition, this study finds that foreign patents in China are primarily driven by demand factors such as imports from the origin countries, while innovative capabilities of the origin countries or their distances from China are not very significant yet. Finally, this study reveals that innovative capabilities of foreign countries are starting to show significant impacts on their patents in China, particularly on inventions, indicating increasing competition in the Chinese market