Lack of IP protection is preventing US firms using China for research and development operations, according to American Chamber of Commerce (AmCham) in Shanghai. A survey reveals that less than 4 per cent of American businesses said China was their most important research and development (R&D) centre due to the lack of intellectual property rights (IPR) protection, limited market access and an unfair business environment. Lack of IPR protection is the largest impediment, say 28.8 per cent.

IP barriers
China has been promoting the nation as an R&D hub and innovation-friendly environment. R&D spending has soar from just US$9.5 billion in 1991 to US$409 billion in 2015. Mainland China is second only to the United States in terms of R&D spending. However, trade tensions are exacerbating concerns about China’s IPR and technology transfer policies amid festering trade tensions. The survey of 52 members, including in-depth interviews with company officials, found only two respondents saying their R&D facilities in China are the most important part of their global research and development operations. The AmCham report states, “Respondents indicated that China remains of relatively low importance compared to other regions.” “Foreign companies pursuing R&D in China face many barriers, several of which prevent them from bringing their core R&D to China,” the report said. Respondents say China, US should put aside trade dispute and work together.

Not making sense
On March 22, the US Trade Representative’s Office issued a sharply worded investigative report contending that China used various review and licensing processes to force technology transfers from US companies. “It makes neither financial or strategic sense to bring advanced technologies to an environment that restricts market access, unfairly champions domestic competitors, and threatens the safety of a company’s intellectual property,” AmCham said.

Full survey report can be found here