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Does China Really Dominate Global Innovation? The Impact of China’s Subsidized Patent Application System
Patents are displayed in the lobby of a Beijing holding group, May 22, 2015. (Visual China Group via Getty Images)
(Visual China Group via Getty Images)

Does China Really Dominate Global Innovation? The Impact of China’s Subsidized Patent Application System

Jonathan Putnam, Hieu Luu & Ngoc Ngo

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Summary

Over the past two decades, China’s economy has grown impressively, while its patented innovations have grown at an even higher rate. But this patent application trend should not simply be accepted at face value. The Chinese government has subsidized patent applications as part of its overall domestic industrial policy agenda, which underlies China’s claim to have “won” the global innovation race, especially in next-generation technologies like 5G or AI. Our study shows that high rates of patenting do not necessarily mean dominance, or even leadership, among the world’s innovation economies. China’s recent announcement that it plans to end subsidies for patent applications by 2025 perhaps acknowledges that its policy is no longer necessary or desirable. In any case, uncritical reports of China’s innovation dominance, overall or in prominent high-tech sectors, should be viewed skeptically, especially by policymakers.

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