The Strategist

Chinese hi-tech strives to become innovative

05/29/2017 - 16:35

In 2016, China has become a leader by number of applications for obtaining patents for new brands. Local companies filed 3.7 million requests. via flickr via flickr
Finnish company TrademarkNow, which studies the intellectual property market, says that high-tech companies became the most active applicants for obtaining patents for new trademarks in the last year. Of the 50 the most active companies, 12 represent this particular sector of the economy. Pharmaceutical and medical technology companies are in the second place (9 out of 50). The third is occupied by companies that work in the field of beauty products and body care (8 of 50).

TrademarkNow’s data is yet another example of the rapid development of the Chinese technology industry. Earlier, companies from China often heard accusations of copying trademarks and technologies. Now, however, Chinese firms have been among the world leaders in the number of applications for obtaining patents.

In total, Chinese companies filed 3.7 million applications in the last year. This is almost nine times the number of applications filed by companies from the United States (414 thousand). India ranks third with 303,000. Japan, South Korea, Brazil, Mexico, and the EU were also included in the top 10. 

Chinese holding Tencent has become the world leader. The giant submitted 4.1 thousand applications, which is 32% more than in 2015. Tencent is known, in particular, for its WeChat messenger, Weibo microblogging service and its online games. The list of 50 companies – leaders by number of patent applications - includes Chinese LeEco, Alibaba, Huawei, Leshi and Baidu.

TrademarkNow notes that Tencent is already the largest company in China and Asia in terms of market capitalization ($ 340 billion). The holding is among the ten most expensive companies in the world. Tencent’s applications for patents cover the widest range of sectors, from games and applications to media and entertainment content.

South Korean LG (second place in the world) in 2016 filed more than 3.4 thousand new applications for patents. The key regions for the company are China, the EU, South Korea, Brazil and Mexico.

The top three leaders in the number of applications in the high-tech industry are closed by another Chinese company, LeEco. The researchers note that last year the company filed 2.1 thousand applications, which is three times more than a year earlier. Unlike Tencent, the majority of which applications in 2016 filed for obtaining patents in China, LeEco is actively expanding the intellectual property base beyond the domestic market. The company is trying to gain a foothold in such regions and countries as South America, India and the United States.

A joint report of consulting and auditing company EY and Singapore bank DBS confirms the given data.

The report says that "while London, New York and Silicon Valley are competing with each other for the title of the world center of financial technology, China has bypassed them. The country became the undisputed global leader in the development of financial technologies and their practical implementation" thanks to such business centers as Beijing, Shanghai, Hangzhou and Shenzhen. Innovation Director of the Singapore DBS Bank, Neal Cross, said he favors the policy of the Chinese authorities, which encourage innovation, not only in words but in deeds, create a favorable business climate and invest in companies such as Alibaba, TenCent and Baidu.

The report’s authors put China’s level of development of financial technologies on a par, or even higher, than that in developed countries such as the United States and Great Britain. At the same time, comparison with neighboring countries shows that China's advantage is simply overwhelming. It is noted that 40% of Chinese consumers use innovative means of payment, while only 4% of consumers do it in Singapore. 35% of Chinese consumers use non-bank companies to obtain insurance services, whereas the number barely reaches 2% in neighboring countries.

James Lloyd, Director of the Asia-Pacific EY Program for Financial Technology Development, notes that "in China, we see a unique combination of rapid urbanization, an extremely capacious domestic market, the growth of e-commerce, the explosive growth rates of mobile Internet penetration, and the desire of consumers to use innovative methods in commerce, banking and financial sectors".


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