Word On Wednesday: The Influence of the Financial Crisis On The Enforcement of Intellectual Property In China

Painting/picture Copyright Dinky 2008

What could be the impact of the financial crisis on the enforcement of intellectual property in China?

Here are some hypotheses on top of my mind:

• Because of the financial crisis most people are afraid to spend money; the demand for counterfeit and pirated products in China and outside of China grows. This means that the importance of enforcement of intellectual property rights increases.
• Because the economic growth in China is expected to fall back to 7.5 percent in 2009 (according to the World Bank) the ability to absorb new arrivers from the countryside into the cities and employ them will be more difficult. Result: unemployment will grow, which increases the chances of social unrest. The Economist of 13-19th December quoted a researcher of the Chinese Communist Party that described it as: “a reactive situation of mass-scale social turmoil.” In China there are still villages dependent on the production of counterfeit and pirated goods. The incentive for the Chinese government to enforce intellectual property and make these people de facto unemployed and thus prone to protest is not very likely. The Chinese government might temporarily look the other way when it comes to intellectual property infringement.

  What do you think?