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Multiple Reasons for Optimism: China's IP Picture Continues to Evolve

By Ernest V. Linek
September 18, 2006

Watch carefully as China now prepares new policy guidelines, expected by the end of this year, for its semiconductor industry. Policy-makers and economists say, no doubt correctly, that China has identified semiconductors as a core part of its high-tech and overall business strategy. Tax exemptions and tax reductions will be major components of the emergent strategy, as will direct subsidies for R&D. Such tactical economic initiatives are expected to affect foreigners, including American expert technicians and corporate partners, as well as domestic interests.

It will also be interesting to see what, if any, intellectual property provisions are included in the new guidelines to both protect indigenous semiconductor manufacturers and assure non-Chinese companies as to the protection of their own products. At the most general level, any formal commitments by the Chinese in this area can only reinforce increasingly optimistic prognostications regarding their overall willingness to respond to global IP concerns ' a willingness that has fast become a matter of Chinese self-interest, if nothing else.

The economic and IP dimensions are more interrelated than might at first seem apparent from the ongoing dialogue on semiconductors so far. IP has not yet been all that publicly conspicuous a part of this particular dialogue. But there's some very relevant history related to China, and its aspirations for its semiconductor industry, which suggests that the forthcoming guidelines may well have multifaceted implications on numerous fronts.

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