More Than Bric-A-Brac: Testing Chinese Exceptionalism In Patenting Behavior Using Comparative Empirical Analysis

Although many developing economies are increasingly influencing the
global economy, China’s influence has been the greatest of these by
far. Once hindered from competition by political and economic restric-
tions, China is now a major economic player. As China’s economic
might has grown, so too has the demand for intellectual property pro-
tection for technologies originating from China.
In this article, we present a detailed empirical study of Chinese patent-
ing trends in the United States and the implications of these trends for
the global economy. We compare these trends to patenting trends from
earlier decades. Specifically, we compare Chinese patenting trends to
Japan, South Korea, Brazil, Russia, and India. We study how patent
allowance rates for Chinese patent applications at the United States
Patent and Trademark Office have improved, and how these allowance
rates compare to allowance rates in earlier “boom” periods from other
East Asian countries.
While many believe that China is an exception in many respects, we
find that patents for innovations originating from China seem to track a
well-trodden path laid down by countries like South Korea in earlier
decades. As a historical matter, we show empirically that China’s pat-
enting trend is not unique. It is instead strikingly similar to the patent-
ing trends of other Far East Asian countries whose inventors have
applied for patents in the United States. In other words, Chinese inno-
vation is moving up the value chain in product development much like
other Far East Asian countries have done in the past. We also find that
China appears to be setting itself apart from other BRICS (Brazil, Rus-
sia, India, China, and South Africa) countries in successfully seeking
patent protection for technological innovation and in producing prod-
ucts with higher levels of technological sophistication and innovation.
Our empirical results can be largely explained by four factors. First,
our work underscores the role of foreign direct investments by multi-
national corporations in China; foreign direct investments are a major
factor driving U.S. patent filings from China. Second, Chinese govern-
ment policies have promoted patent protection and aligned Chinese
patent office procedures with the procedures of the U.S. Patent and
Trademark Office. Third, investment in research and development in
China by both domestic and foreign entities has increased significantly.
Fourth, the Chinese government has committed to moving up the value
chain in products and services.