On October 18th, the 19th National Congress of the Communist Party of China convened at the Great Hall of the People in Beijing. A total of 2,280 Communist Party delegates were approved to attending the political event, representing an estimated 89 members of the party in China. On the opening day of the proceedings, Chinese President Xi Jinping was given a new five-year term to serve as general secretary of the Communist Party, cementing his place atop Chinese federal government leadership through 2022.
In a three and a half hour-long speech delivered to the National Congress, President Xi set certain economic goals for China such as the elimination of poverty by the year 2021. He also called for policies which would remake China into a “fully developed nation” by the year 2049, the 100th anniversary of the People’s Republic of China. There is also some speculation that Xi may be laying the groundwork to pursue a third five-year term as the Communist Party’s general secretary, a move that would be a break with recent tradition among his predecessors.
News of President Xi’s reappointment as his party’s general secretary came amidst a shake-up to the Communist Party’s Politburo Standing Committee, a group of seven of the top leaders of the Chinese Communist Party. Although Xi and longtime Communist Party leader Li Keqiang have been reappointed to the Standing Committee, the other five members are new and reportedly represent different party factions while also being aligned with Xi. As the new leadership crafts Chinese economic policy in the years to come, Xi announced at the National Congress that the party will seek to spread “socialism with Chinese characteristics” as an economic model for developing economies around the world.
The Communist Party’s National Congress convened a few weeks before President Donald Trump was scheduled to meet with President Xi in Beijing. Trump set out on November 3rd for a five-nation tour of Asia and was scheduled to meet with top leadership in Japan, South Korea, Vietnam and the Philippines as well as President Xi. This will be the longest tour of Asia for any sitting U.S. president since 2000. Along with meeting state leadership, President Trump’s tour of Asia will include appearances at regional conferences like the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC) summits.
In addition to President Xi’s remarks on exporting China’s socialist economic model to developing nations, Chinese state-run media is doubling down recently on the notion that China will be the new economic model for the entire world in the years to come. An op-ed published by The People’s Daily Online, an English-language Chinese state-run news outlet, openly questioned whether or not America was still the world’s role model for economic growth and development. “While the US still has an important role to play in this new era… a coherent message is forming: the world does not just revolve around the West anymore,” the op-ed’s author writes. The author claimed that the advantages of the Chinese economic model are being recognized around the world at a time when the disadvantages of the American economic model are being highlighted. “So whether one wants to admit it or not, a new role model is in town.”
China is the world’s most populous country with 1.4 billion inhabitants and it’s home to the second-largest economy, exceeding an annual gross domestic product (GDP) of $11 trillion USD in recent years according to statistics published by The World Bank. The World Bank notes that since 1978, the Chinese federal government has pursued economic reforms to ensure that the country’s economy is more market-based and less centrally-planned. Although Chinese GDP has grown rapidly in recent years, per capita incomes are still at a low level; 2016 saw per capita incomes of $8,260 according to The World Bank. As The World Bank notes, that per capita income level is a fraction of what is seen in other economies and puts China itself on the level of many of the developing nations it’s hoping to influence with its economic model.
As many of the Founding Fathers of these United States understood, a strong system of intellectual property rights is essential to securing the economic prosperity of a nation’s people. That’s one reason why the intellectual property clause of the U.S. Constitution is included in Article I of that document. When a statute is found in the first article of a document that founded a nation which was home to the world’s strongest economy, it’s fair to assume that there’s some importance attached to that statute.
According to the 2017 Index of Economic Freedom, a ranking of national economies developed by The Heritage Foundation, China ranks 111st in the world in terms of national economic freedom behind Moldova and ahead of Sri Lanka. However, one area where China has seen some improvement in the Heritage Foundation index is in the area of property rights. Although China’ 2017 score of 48.3 percent on freedom of property right owners still classifies it as “repressed” to Heritage, that’s a sizable increase from the 20 percent score on property rights given to China by Heritage since 2007. It’s the highest property rights percentage score given to China by Heritage going back to 1995, when China scored only 30 percent.
It can be assumed that some of this improved property right score can be attributed to China’s improving stance on intellectual property rights. China is relaxing barriers to software and business method patents. China is streamlining the patent examination process for Internet and big data patent applications. Foreign plaintiffs in patent cases have been winning their cases at an astounding rate in Beijing’s specialized IP courts. This summer, President Xi spoke at an important Chinese economic forum and remarked upon intellectual property matters, telling economic regulators that “IP infringers will pay a heavy price.” A few months later, China’s copyright regulator told foreign and domestic music companies to adhere to international licensing practices in order to reduce piracy. Increased IP protection is helping Chinese domestic telecom firm Huawei amass huge revenues for licensing patents. American tech firms are even finding the Chinese court system to be a proper venue for fighting out patent claims as is evidenced by the recent case filed by Qualcomm against Apple’s use of power management and touchscreen technologies.
In mid-August, the Trump Administration announced that it would probe the alleged theft of U.S. intellectual property as aided by the Chinese federal government. One could assume that this probe might be a topic of conversation. During this conversation President Trump should ask President Xi to explain how a Communist regime is capable of having a better understanding of the importance of protecting patent rights than a nation ostensibly built on private property rights; a nation that has previously been the bastion of capitalism through the 19th and 20th centuries.