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A USA and China population comparison.

By Aaron B. Thalwitzer

Many Westerners view China as little more than the world’s factory (albeit a threatening one). While there’s some truth to the notion they China will merrily manufacture just about anything with little regard to patents, copyrights and trademarks, things are changin. According to the World Intellectual Property Organization (WIPO), the company that applied for the most patents in 2008 was not an American or Japanese company but China’s Huawei Technologies. And China has made up astonishing ground recently, moving up to third place with 203,257 patent applications, behind only Japan (500,000) and the United States (390,000). It remains to be seen if these patents applications will come to fruition for China, but it is evident that they are focusing on a new image as a leader in research and development.

It’s been said that China ignores foreign patents in order to acquire those ‘illegal’ patents for use against foreign firms. However, those days are more likely over or nearing their end. Europeans accused the U.S. of doing the same things when it was industrializing, but eventually the U.S. started inventing its own unique designs. At that point, the U.S. started truly enforcing I.P. rights. I believe that China will join the I.P. mainstream once it has truly unique inventions to protect, and I believe that time is nearing, if not here already.

If China does end up owning legitimate I.P. and keeps producing everything, they may be in line to control the whole megillah, from idea to end product. Or so goes the story. However, China might not be as much of a juggernaut as the hype would indicate. The U.S. still has the best engineering schools in the world, and (believe it or not) at least as many new engineers per capita as China.

The U.S. graduates about 140,000 engineers each year. China graduates about 375,000. The consensus is that the average U.S. engineer is much better than is his Chinese counterpart. It makes sense that a country with more than four times as many people would produce more patents, especially if the I.P. protections are more lax. So, take a deep breath. We’re doing fine and so is China.