Innovation-driven Firms Increasingly Look Abroad

Overseas expansion spurring rapid annual growth in PCT filings; data shows surging interest in Belt and Road Initiative regions

An increasing number of innovation-driven Chinese companies testing the waters abroad are spurring "rapid growth" in international patent applications filed via the Patent Cooperation Treaty in China, according to the State Intellectual Property Office.

The latest SIPO data show PCT filings grew 16 percent year-on-year to 21,600 in China in the first half of this year.

Of those filings, 20,000 were from domestic applicants, increasing 15.3 percent from the same period of last year. The numbers reflect growing momentum in Chinese companies armed with proprietary intellectual property going abroad, SIPO spokesman Hu Wenhui said at a news conference in Beijing last week.

PCT filings from abroad increased 26 percent year-on-year to 1,600 during the period.

Guangdong is the largest PCT filer among 31 provinces, municipalities and autonomous regions on the Chinese mainland, with 11,900 applications filed in the first six months.

Beijing, Jiangsu, Shanghai, Shandong and Zhejiang have all reported more than 500 PCT filings.

The top six have contributed nearly 90 percent of the country's PCT filings by Chinese applicants.

Countries and regions involved in the Belt and Road Initiative are becoming popular destinations among Chinese filers.

The initiative, proposed by China in 2013, aims for increased international cooperation by revitalizing the ancient trade routes. It's also known as the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

The first six months of this year saw more than 2,100 PCT filings from China destined for 17 countries and regions involved in the initiative, representing 17.8 percent growth year-on-year.

With more than 1,000 filings, India ranked top among the destinations, followed by Russia and Singapore.

In comparison, China received more than 2,000 patent applications from filers from Belt and Road countries and regions during the period, up 23.2 percent year-on-year.

"The burgeoning growth in patent filings shows the Belt and Road countries and regions' faith in China's market and our intellectual property protection environment, and also reflects accelerated pace of Chinese companies going overseas," Gan Shaoning, deputy commissioner at SIPO, said at an earlier forum.

Behind the growth is booming foreign trade and investment.

China reported 13.14 trillion yuan ($1.95 trillion) in foreign trade from January to June, a 19.6 percent rise year-on-year, creating a half-year growth record high since the second half of 2011, according to data released by the General Administration of Customs earlier this month.

Exports grew 15 percent year-on-year to 7.21 trillion yuan during the period.

For prudent traders looking to overseas expansion, IP filings are generally considered ahead of business operations in the targeted markets, industry insiders said.

In the investment sphere, Chinese entrepreneurs have completed more than 650 deals each worth at least $100 million in overseas mergers and acquisitions over the past decade, according to a report released by McKinsey & Company, a management consulting firm, in April.

A PwC report released in January shows that investors from the Chinese mainland poured a combined $221 billion in overseas acquisitions in 2016, a more than twofold increase from a year earlier.

Patented technologies, well-established brands and mature marketing channels are among the primary factors for the overseas deals, industrial observers said.

Source: China Daily