IP risk control under the Belt and Road initiative

The Silk Road Economic Belt and the 21st century Maritime Silk Road (the Belt and Road initiative), proposed by President Xi Jinping in September 2013, passes through more than 60 countries and regions from Lithuania to Indonesia. PwC’s analysis shows that PRC companies spent US$221 billion on overseas M&A transactions in 2016, which exceeds the aggregate sum of the previous four years. More than 58% of officers from Chinese enterprises believe that the Belt and Road initiative provides investors with enormous opportunities, especially in railways, highway construction, power stations and transmission networks, airports, terminals, data network construction, land use planning, real estate development, urbanization and tourism.

According to the principal of the Ministry of Commerce’s Service Trading Office, China’s service imports and exports achieved double-digit growth in the first half of 2017, when exports of intellectual property (IP) rose by 458.4% on a year-on-year basis. However, Chinese enterprises are facing growing IP risks as they are increasingly involved in investment, M&A, technical co-operation, service provision and trading activities in countries along the Belt and Road, and as China takes steps to transform from “made in China” to “intellectualized in China”. Enterprises should look ahead at what might happen, and be prepared.

Data from the State Information Centre show that the Chinese economy almost equals the sum of the 60-plus economies along the Belt and Road. In other words, countries along the routes are generally less developed than China. Enterprises investing in these countries face unprecedented potential risks and challenges compared with investing in developed markets such as the US and countries in Western Europe.

Wang Yadong is a partner and Lu Lei is a senior attorney at Rui Bai Law Firm