Observing Development and Impact of Patents Through Figures

September 22, 2003

Observing Development and Impact of Patents Through FiguresIn 18 years, what patents have contributed to China’s economy?

It has been 18 years since the Patent Law of People’s Republic of China was first launched and put into effect. At the recent meeting of National People’s Congress, (former) Premier Minster Zhu Rongji stated in his report that in the past five years, 140,000 awards on technology achievement at state level had been granted, and 520,000 patent applications had been approved. It was the first time in the Chinese history that statistics concerning intellectual property right had appeared in the government’s report to National People’s Congress.

The number of patent application is directly related to GDP.

Economists believe there is a close link between the number of patent application and the growth rate of China’s GDP. Some developing countries even consider the number of patent applications as an influential economic indicator affecting GDP. Some economists in the United States have been warning Federal Reserve Chairman Greenspan that according to the recent statistics on patent applications, things do not look positive for the future of the United States’ economy this year. Basic economic intuition would recognize the relationship between innovation and patent applications: the more innovative a country, the more patents applied for.

China’s astounding growth over the past decade is revealed through a variety of statistics. In the past five years, China’s GDP has increased from 7,400 billion RMB to 10,200 billion RMB (equivalent to 1,243 billion U.S.D). The total annual financial income of the state has increased from 865.1 billion RMB to 1,891.4 billion RMB. The total foreign currency reserved by the state has increased from 139.9 billion U.S.D to 286.4 billion U.S.D. The length of the express way built has increased from 4,771 kilometers to 25,200 kilometers. The number of subscribers of both immobile phones and mobile phones has increased from total 83.54 million to 421 million. The underlying fact behind all these growth statistics is that as these industries were growing, so was the number of patent applications granted in every industry closely tied to this economic surge.

The number of patent applications has taken off along with the perpetually growing economy of the state. In 1985, the total number of patent applications was 14,372. By 2002, the number of patent applications had increased to 25,2632, an increase of 17 fold compared to 1985. From 1997 to 2003, the number of patent applications increased at a rate of 221%. This rate is much higher than the average GDP rate of 138%. Based on the current trend that science and technology are contributing tremendously to the state economy and its growth, it seems obvious that the increase of patent applications will play a leading role in economic development of China.

The head of National Administration of Intellectual Property pointed out, among all the patent applications, domestic applications increased by 30%. Of those domestic applications, the agriculture industry increased quite rapidly relative to the other domestic industries.