Intellectual Property Rights and Internet in China

Subject: Law
Pages: 20
Words: 5241
Reading time:
19 min
Study level: College


The importance of the internet and the aspect of globalization and digitalization of various sectors of economy cannot be overemphasized. The internet has revolutionized communication by the establishment and expansion in various areas of information technology. Furthermore, the internet has led to the optimization of human capacity to utilize and create resources. (Meyer, 1997). According to Fogel (2010), China is one of the fastest growing economies whose rate surpasses even most economic giants.

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Currently, experts are even grading economic developments in various countries in terms of their usage and exploitation of the internet at various levels of their economies. Initially, internet use was only restricted to large companies and government institutions and there was no much trouble monitoring internet use. Currently China seems to be one of the countries that are conforming to the dream of Windows founder Bill Gates of a computer in every household.

In China, the internet has had significant social and economic significance by influencing the activities carried out by the Chinese people. The internet has also opened up China to the outside world because the internet programming languages are universal and communication has become easier and more efficient. China is one of the world’s largest producers of commodities, owing to technological advancements and the manpower provided by its vast population. (Fort, 2002).

The study of intellectual property in China closely relates to the internet. In particular, the cyber space and the conflict raised in these terms have touched upon political, social, and economical biases imposed at the international level. This issue is rather complicated, as it reveals vigorous discussions concerning a neglected attitude to Chinese people due to absence of laws that can insure sufficient data protection.

Overview of the Thesis Topic

E-commerce has been a major source of wealth for various economies, but China seems to be having trouble in taking advantage of this new gold mine. The internet makes the process of searching, locating and sharing of data much easier and consequently impacts on commerce. There is no doubt that the presence of the internet and digitalization has greatly impacted the culture of the Chinese people more ways than one.

Initially, China could have been described as a close knit community whose interaction with the outside world was only restricted to various aspects of business. However, the internet has exposed China to the rest of the world, and various social and economic perspectives experienced in the world as a result of internet usage are also experienced in China. These aspects, when influenced by population and technological advancements may even be more magnified in China.

The realization and the subsequent developments in the area of intellectual property rights, has meant that more and more authors and developers of various commodities, can enjoy the recognition and the money. However, with developments of the internet it has become much easier to access anything that has been digitalized and posted on the web; free of charge in some instances. As the software development sector is struggling with issues of software piracy, authors are also crying foul due to the use of their original works without recognition let alone payment.

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There is the possibility that internet piracy in China may appear overemphasized due to the vast population that has access to the internet. Piracy is a global problem and the tough measures taken by the Chinese government regarding censorship is tantamount to responding to a mosquito bite with a hammer. Countries like the U.S and software developing companies are already directing blame to the Chinese people for hacking incidences and violation of intellectual property rights. The result is that most software developing companies and various sites have a tainted view of the Chinese people for a problem that could be facing most countries.

The next issue that arises when studying piracy and violation of intellectual property rights is that, initially when the policies were being adopted apparently there was no scope for the existence of the problem in a digital perspective. Intellectual property rights as adopted and interpreted by different countries show discrepancies and ambiguity in certain cases. Furthermore, the extent to which a particular act can be considered violation of intellectual property right is also poorly defined and lacks clarity.

It is for this reason that most nations that point accusing finger at China, should be more analytical before imposing various measures that end up denying the Chinese people the right to have unlimited access to the internet. It is far from this research to seek to justify the ills associated with violation of intellectual property rights and piracy. However, it is also important to look at the extent of the issue at hand and the apparent unfairness in terms of the approach employed both by the Chinese government, other countries, software companies and various search engine sites. The Chinese government has over the year been very strict over the protection of the Chinese culture and heritage from infringement by the western cultures.

Consequently, the government has had within its policies to monitor the information available on the internet that can be accessed by the Chinese people. However much the intentions seem to be justified, the rest of the world has taken upon itself to condemn the Chinese people as lacking the fundamental aspects of freedom of expression, and access of unlimited information. This apparent misjudgment by other countries is both hypocritical and far-fetched.

This argument requires analysis due to the fact that it demonstrates that the biasness with which the issue has been approached, and the fact that it violates the rights of the Chinese people in terms of equality of race and nationality. The approach of the Chinese government towards this issue compounded by the fact that other countries and software companies, have also developed unfounded prejudice towards the Chinese people.

These issues call for much analytical approach to look into ways with which the current policies adopted by the Chinese Government, and the attitude of the rest of the world, with regard to intellectual property rights has affected the Chinese both economically and socially. As the economy of China continues to grow with respect to technological advancements, manpower and the general will of the Chinese people, it is important to look into ways with which the advancements can be optimized even further. Generally, such a subtle factor as unlimited internet access can have profound impact on a people both economically and socially.

Moreover, the economic policies of the Chinese government demand that it is important to protect the brand and quality of goods as a way of enhancing competitiveness of China in terms of market for goods from other countries, and as a major producing country. It is therefore imperative that proper laws for the protection of intellectual property rights be established, in order to increase the quality of goods produced and to encourage innovation and creativity. However, this should be done cautiously to ensure that the fundamental rights of the Chinese people are not denied and that harmony exists between ensuring the safety and originality of culture and heritage, and the attainment of an environment where intellectual property rights are duly protected.

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Literature Review

The last century has significantly seen China grow from an agrarian dependent and small manufacturing country, to highly sophisticated economy with large manufacturing companies. Currently, China ranks among the highest producer of goods. According to the U.S-China Business Council (2010), the exports from China to the rest of the world totaled 1,201.7 billion dollars in 2009 with the U.S, Japan and Hong Kong being identified as the key trading partners of China.

China, owing to its huge population also forms a potential market for products from other countries. These developments are due to the fact that China has continually taken advantage of technological advancements to ensure that goods produced in China are of competitive quality. According to Maskus (2002), such a successful business environment requires the adoption of proper intellectual property rights to ensure that productivity is optimized. This is to ensure that both buyers and sellers in the market are protected from unscrupulous people who are out to produce imitations of quality products illegally.

This is understandable because globalization has made competition stiffer, compelling companies to establish and protect the quality of their brands. Furthermore, when producers are assured that the brands of their products will be protected from piracy and illegal use, they become more encouraged to be inventive and innovative. The result is that more and more quality products will be produced from China and more investors will be attracted to the Chinese environment. The only way to arrive at such a business environment is to establish strong intellectual property rights policies that are applicable to both the locals and foreigners.

Applicability stems from the fact that the Chinese market is unique and so is the culture and heritage of its people. Maskus points out that the Chinese government has already been aware of the importance of intellectual property rights, and have already started to cooperate with companies that are likely to fall prey to piracy and unlawful usage and access to information. The Chinese government has over the years kept pace with approaches to curb the violation of intellectual property rights, and as Maskus outlines, China has adopted tangible policies and aligned itself with international bodies advocating for the protection of intellectual rights.

The major concern is the genesis of the suspicion for the Chinese market as a hub for piracy, and the apparent discontent of other countries with the tough approaches by the Chinese government. The answer to this concern will shed more light towards the study of the social and economic implication of these aspects on the Chinese people. Perhaps, it could be that the approach by the government is too strict and therefore denies the Chinese people the access to useful information in the internet, or that other developed countries and software companies are partly biased in their perception of the Chinese business environment. It could also be that both factors are at play.

However, statistics indicate that China, being an economic giant in the globe is crucial when attempting to curb the violation of intellectual property rights. According to (2006), “China is the Pinnacle of all violations.” further explains that China is not only part of the problem but could also be part of the solution. This is because any steps taken in China will have a wider impact globally. justifies this aspect by providing facts related to piracy in the Chinese environment. According to (2006):

Out of the estimated $512 Billion counterfeit market, China counts for nearly 2/3 of counterfeit goods. Not only is China exporting these pirated goods abroad, but also selling them rapidly at home, as the copyright industry estimates more than 90% of all music Cd’s, movie DVD’s, and software sold in the developing country are pirated. About75% of counterfeit goods seized at the U.S. border ($214 Billion) originates in China. These are just some of the estimates from overall counterfeit goods.

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Such an extent of piracy is utterly unacceptable in any business environment, and by any standards for that matter. This creates the impression that the situation is already out of control. It is also obvious that the Chinese government, which most likely is aware of these statistics, feels the pressure and employs even stricter rules to try and put the situation under control. The business implication is that more companies will be adamant to venture in the Chinese market or even make their goods available in the Chinese market for fear of piracy. This situation is obviously worsened by the fact that establishing control in the internet without the infringement of rights is difficult.

The situation is somewhat catch 22 for the Chinese government. Consequently, it threatens the business environment in China and may even disable various economic developments that have so far been achieved. However, it should also be recognized that China is in an awkward position of being perceived as being a hub for piracy, while at the same time suffering from the same. This is because as outlined by, a significant amount of the pirated goods are also sold in the Chinese market.

Therefore, it is understandable but not excusable when the Chinese government imposes stricter laws as a move towards the protection of intellectual property rights in China. Politics associated with the communism rule also has some share of the blame, regarding how the Chinese perceive and respond to issues pertaining intellectual property rights. According to Moynihan et al (2004), before the 1980s international property rights related laws had been crucified in the alter of communist propaganda by politicians. Consequently, a business environment characterized by turmoil was nurtured where business was conducted without any regard for such laws.

However, since the 1980s after the apparent realization of the importance of international trade, China began embracing business partnership with western countries. A major pre-requisite for the success of this kind of international trade was the adoption of strict international property rights laws. Moynihan et al explains that:

The need for a modern, more international style of legal framework came with the period of economic reform began in the late 1970s by Deng Xiao Ping’s ‘Open Door’ policy to welcome western business, leading to the increasing adoption of a market economic system and the liberalization of trading conditions.

This apparent shift of policy by a government that preferred to have control over all aspects of the economy, as expected was met by appraisal from western countries. However, the social and cultural implications of such a move as would later be realized would have a significant effect. Logically, it would be hard for a people who had gotten used to state control to enjoy the liberalization of trade. Globalization is a wind of change that no country that hopes to succeed in the international trade can afford to ignore. Furthermore, being an international occurrence, it is important that nations observe caution on how they approach globalization.

Apparently, China had opened up its borders for international trade and adopted strict international property rights laws, but still hoped that it would dictate how trade functioned. As explained by Yan (2007), when he analyzes the approach taken by the Chinese government towards globalization, the government has both failed and succeeded. Cultural globalization takes place in four perspectives: business elite culture, popular culture, intellectual culture and social movements.

Apparently, the government seemed least concerned by developments in the business elite culture and popular culture and even allowed for the corporate adoption of ‘western style management system and corporate culture’ (Yan, 2007). This is because these aspects had been identified by the government as ways to convince the world, that China was becoming more liberalized in the business world. However, intellectual culture and social movements seemed to be the foundations communism and the government was adamant to expose them to western ideologies. The internet became the greatest casualty due to its swiftness, in terms of data exchange.

According to Yan (2007), western countries saw the internet as a subtle way to challenge state control in various aspects of economy in China. According to Yan, “Transnational companies did take a large share of the vast internet market in China…they hardly had any impact.” This is because the government still managed to control the operations of these companies by cleverly using policies and regulations. The consequence is that the government has been mixed up in ensuring that China enjoys the benefits of globalization economically and protecting its political ideologies. This would be rather confusing for the business environment in China where transnational companies would be compelled to be cautious lest they lose favor with the government.

In an attempt to create the impression that it is determined to take control of the situation, and cooperate with other players in the sector, the Chinese government made amendments to its intellectual property laws in line with the “Agreement on Trade-Related Intellectual Property Rights in the World Trade Organization.” (Maskus, 2002). Apparently, China has realized the importance of the trade that goes on within its borders and the implication it has in a global perspective.

The Chinese government being prudent enough also had to look for ways to transform the illicit activities into more intellectual property rights sensitive businesses. This is because, they had already become widespread and the implication is that although these businesses were engaging in illegal dealings, their instant destruction would have significant implication towards the Chinese economy. Transformation instead of complete destruction would prevent loss of jobs and businesses. This is because through training some businesses could be nurtured to engage in legal activities.

Against this backdrop, the Chinese government is also compelled to act swiftly or else, risk losing important investors and market for Chinese goods. However, this is not the only challenge facing any country that has placed it upon itself to implement effective intellectual property rights laws. The Chinese business environment and the social cultures are very much unique. As a result the laws implemented by the Chinese government will be primarily geared towards protection of businesses within its borders.

The international perspective only comes as a secondary concern. However, as business dealing continues to expand as explained in statistics provided earlier on, the aspect of conflicting laws and approaches towards intellectual property rights becomes inevitable. (Geller, 2005). For instance, the U.S is currently the major complainant of the extent of intellectual property rights and also the major importer of Chinese products.

Therefore, the research by Geller in terms of ambiguity and lack of clarity in terms of intellectual property laws, in issues pertaining to territoriality sheds more light when looking at China. As outlined by Geller, the technological advancements in the areas of information technology and the internet have only made the situation worse. Geller goes on to explain that the ambiguity makes it difficult for one country to completely have control of the flow of information between and other countries.

Furthermore, in case of a lawsuit involving parties from two countries that obviously have different laws, it becomes difficult for the judge to decide on which laws to use. The ambiguity does not end here because, when one country implements strict laws on issues pertaining to intellectual property rights, it still becomes difficult to establish absolute control because pirated information or software might still originate from other countries, which have less strict laws. Geller explains that: “The choice of laws might well chock off data flow to or at points within the internet that policies within these countries would still leave open.”

Geller in providing ways with which conflict resolution may be done, explains that the courts can either assume that the parties exists in a static community or resolve the conflicts in terms of the economic aspects that have brought the two parties together. Geller explain that the static approach only promotes further ambiguity and is therefore not effective in dealing with intellectual property rights related cases.

He recommends the use the economic dynamics for instance in this case the use of globalization. He goes on to explain that globalization has managed to bring communities together to form one big global village, whose consideration would make conflict resolution easier. Geller concludes his research by pointing out that courts will continually be faced with conflicts with regard to international property rights and the best approach is to view the cases from an international perspective. However, Karatzogianni (2008) points out that the approaches adopted so far do not address the issue conclusively.

Although Karatzogianni deals much with the political and social impacts of increasing cyber insecurity, the same networking are being used by pirates to covertly access and transfer information illegally. Karatzogianni reveals that the intricate networks used by pirates present a major problem towards the protection of intellectual property rights. The bottom line in his explanation is that terrorist groups have for a long time used the internet plan attacks or spread anti-government or anti-American propaganda over the internet. These groups use “techniques such as email lists, email spamming, BBS, peer to peer and e-magazines” (Karatzogianni, 2008).

Furthermore Karatzogianni outlines that even the U.S government’s move to prevent solders in Iraq from accessing sites such as YouTube have proven futile as the solders can still use private internet access. The same techniques are being used by pirates to evade recognition by authorities. The essence of Karatzogianni’s book in this perspective is also to outline that apparently, the use of internet by governments to spread pro-government propaganda, for instance the use of the YouTube by the U.S to justify the Iraqi war perhaps provides pirates with hints on ways with which internet can be exploited. Furthermore, he explains that the internet has created a community that can neither be controlled nor monitored by any government authorities or by corporate. The problem faced by the Chinese government now slowly becomes clearer.

The second part of this literature review will seek to establish the cultural and social impacts of internet in China, and the subsequent implications considering the censorship by the government. This part will also look at the economic implications. First and foremost, the Chinese is considered an utterly resilient society that has managed various developments in terms of technology and the economy in general, despite major challenges. As Perry & Selden (2003) outlines:

In the closing decades of the twentieth century, China defied the best predictions of development economists and sinologists alike in compiling a stunning record of economic growth. This was accomplished in the face of formidable obstacles, including inefficient state enterprises, ambiguous property rights, irrational prices, primitive transportation, and outmoded banking and securities facilities.

The situation explains the current state of most third world countries and the irony is that China is one of the fastest growing economies in the world. Furthermore, China is among the few communist communities that have survived the changes imposed by capitalism. The secret as Perry reveals, lies with the approach that Chinese leaders have adopted. The government has specifically been aggressive in terms of “Market, mobility, modernization and internationalization. “ (Perry).

Perhaps it could be that the government approached internet with the same zeal, unknowingly of the looming perils. The government could have created the same situation that it is now currently attempting to fix. The aspects as outlined by Perry ensures that economic growth is maximized by the creation and exploitation of new markets especially in third world countries as recently observed, mobility in terms of establishing versatile production, modernization in terms of using the best technological techniques in production and internationalization in terms of creating a ready market for international goods in China and making China an investment point.

According to Nick (2006), globalization has been received in China with mixed emotions especially with regard to the extent to which it will culturally impact on China. A section of the Chinese people are of the opinion that globalization will modernize China and perhaps encourage democratization of the Chinese political system.

Others approach globalization with fear that as Nick outs it promote, “Individualism and consumerism. The same aspect of consumerism is discussed by Yu (2009) who adds that among other factors such as the “rise of popular culture, marginalization of intellectuals, …and China’s integration into the global capitalism,” have re-defined China in that ideologies and philosophies are not just followed blindly but are analyzed against other ideologies in the global perspective. Consequently, it is obvious that the Chinese government might encounter some resistance when it comes to screening internet sites imposing strict internet laws, in a world regarded as liberal.

However, confident that the Chinese culture is much stable to stand the effects of globalization, Chinese leaders went ahead and exposed China to the outside world. Nick warns that this assumption might prove to be dangerous especially it comes to protecting the Chinese culture and heritage. This has become apparent, especially when considering the impact that the internet has had on the Chinese and the difficulties the government is facing in terms of ensuring that culture and heritage are protected. (MacKinnon, 2008).

This can be substantiated by the fact that the Chinese government is currently implementing measures that may be considered desperate, in terms of having no concern whatsoever on the social and economic implications. Screening of information via compulsory software that people are required to install, to censoring of Google search engine are some of the moves the government has taken. The consequences can be seen in the threats by Google to completely exit the Chinese market and stop the usage of its software in China. Considering how lucrative the Chinese market is goes on to further outline extent of discontent with such a move.

The Chinese government has overlooked the social and cultural benefits of using the internet and rushed to impose internet screening. The ways that the Chinese are enjoying the use of internet in various cultural and socially developments can be extrapolated in a global perspective. (Zhou & Zhou, 2002).

In an article by Spahn (2006), as it analyses the case of Wang Hong v. Maxstation that “created a widespread political controversy on the internet in China, highlighting an underlying tension in the current policies of the Chinese government, which promotes a more open market economy while maintaining tight censorship over public speech” (865). This particular example is the best way to witness the core of the conflict and outcomes arising from this problem.

Viewing the structure and methodology, it should be stressed that the author considers the aspect of the internet speech control. In the article, a considerable emphasis has been made on the examination of defamation law that is viewed in the context of policies directed at controlling censorship and public information exchange. The author also argues that “From the Western perspective, an increase in economic trade is often believed to be the necessary precursor to a freer and more open society”, which considerably contradicts Chinese views.” As explained by Perry (2003), the Chinese are not always conventional and the approaches that have so far been adopted by Chinese leaders have proven to be successful.

According to Yan, (2007) the economic reforms implemented by the government since 1970s has transformed China into a regional and international economic giant. In the same perspective various goods have been able to cross to and from the Chinese market and with the introduction of the internet, these goods cross with even greater ease. However, the Chinese approach may be significant in ensuring economic developments but on the other hand having a negative impact on the rights of the Chinese people and the attitude the west has towards the people of China. (Knight, 2006).

Yang (2003) in a study into the relationship between the internet and the civil society, points out that “they energize each other in their co-evolutionary development even as both are constrained by other forces.” Yang explains that the civil society provides the social basis of interaction between people, and in turn the internet provides the civil society with easy way to exchange information and technology, apart from the fact that the internet is full of resources. Therefore, the internet and civil society are interdependent. However, the greatest challenge towards the enjoyment of this relationship points back to the government that has imposed regulations and policies, thereby restricting internet access.

Concerning veritable outcomes, the author outlines that internet penetration to China and the problem is to find the ways in which both the communicational technology and democratization can be advanced and developed. In this respect, the author argues that there is a positive consequence of internet and civil society relations, as the internet market is closely connected with economic and cultural integration processes. The problem is that the internet can serve as tool of “political control and political impact” (408).

In the research, the author has resorted to different kinds of approaches and methodologies. The irony is that as the government is screening the internet from the Chinese people, the same government is maximizing the benefits of the internet by using it in various institutions. (Chinese Culture 2010). The basis of this article is to outline the positive cultural benefits that the internet has brought to the Chinese people. The internet has provided forums for the discussion of views regarding various topics and opened up Chinese villages to the urbanites. Therefore, it is far-reaching that the government should impose such strict laws to protect a culture that it once considered solid. This relays a confusing environment that may be perceived as weak international property rights adherence by the government.

The implications of these findings further outline how much China is significant towards the implementation of intellectual property rights with regard to the internet. However, the world and the Chinese government have also imposed various limitations on internet usage in China owing to various accusations related to violation of intellectual property rights. Furthermore, the Chinese government in its bid to establish control over internet usage by the Chinese people has also implemented a firewall system that provides restrictions on the sites that the Chinese people can access. (Cheung, 2009).


Although at some time in China’s history, the government was certain that the Chinese culture and heritage was strong enough to resist western influences, the internet shattered the certainty. China is a key country in the global economic development and it was obvious that it would take advantage of globalization especially the internet. However, it has become apparent that the government is split between protecting the culture and heritage of China and embracing economic liberalization. Change is inevitable and sometimes painful, but when approached in stages of small doses, it would have the least negative impact.

The Chinese government should identify the economic dynamics at play in China, let the dynamics take control and only act as a moderator. This approach would send the correct message especially when dealing with intellectual property rights.


The importance of the internet and the aspect of globalization and digitalization of various sectors of economy cannot be overemphasized. The internet has revolutionized communication by establishment and expansion in various areas of information technology. Furthermore, the internet has led to the optimization of human capacity to utilize and create resources. China is one of the fastest growing economies whose rate surpasses even the economic giant America.

Currently experts are even grading economic developments in various countries in terms of their usage and exploitation of the internet at various levels of their economies. Initially internet use was only restricted to large companies and government institutions and there was no much trouble monitoring internet use. Currently China seems to be one of the countries that are conforming to the dream of Windows founder Bill Gates of a computer in every household.

In China, the internet has had significant social and economic significance by influencing the activities carried out by the Chinese people. The internet has also opened up China to the outside world because the internet programming languages are universal and communication has become easier and more efficient. China is one of the world’s largest producers of commodities, owing to technological advancements and the manpower provided by its vast population. The study of intellectual property in China closely relates to the internet. In particular, the cyber space and the conflict raised in these terms have touched upon political, social, and economical biases imposed at the international level.


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