Welcome to ChinaInvest.biz Magazine - May 2010 Issue

ChinaInvest.biz Media Limited is a member of Klako Group and will be providing monthly insight into investment, tax and operational issues for foreign companies entering and operating in China.

Although counterfeiting is illegal, the Chinese government is in a predicament because to put it simply, fakes have been and continue to be good for the economy. The profits earned from counterfeiting and violations of intellectual property rights are critical to local economies. Counterfeiting absorbs large numbers of workers, generates substantial revenues and provides tax revenues. For years, Chinese authorities turned a blind eye to counterfeiting on the grounds that it helped spread developing technology and essentially it is a “victimless” crime. The Chinese have a tendency to borrow, not steal, and copying technologies is not seen as ethically wrong.

There is no single or simple solution to protecting intellectual property in China. The ideal checklist includes obtaining comprehensive local protection in the form of patents, copyrights or trademarks for the products, lobbying with the growing number of protection agencies, and developing sensible business strategies that take Intellectual Property risk into account. Foreign companies who decide to establish their entity in China should take all precautions to avoid possible Intellectual Property Rights Infringements. If the companies register all their patents and trademarks, it does not necessarily mean they are safe
but it is a step forward to being protected.

Intellectual Property Rights in China
By Klaus Koehler, Managing Director, Klako Group

Intellectual Property Rights (IPR) - “If you can make it, they can fake it!”

A common phrase used in China. China’s economic boom is not only about the on average nine percent annual growth rate. The counterfeiting business in 2008 accounted for approximately USD $221.4
million in lost sales. Intellectual property (IP) protection is one of the major concerns that western companies have while deciding whether to collaborate with Chinese companies or even enter the China market. The IP protection history in China is very short. For centuries, the Chinese people had not had any sense of protecting their own inventions or respecting the inventions of others. Not until 1984, when the Chinese government established its first patent law. The Chinese government has realized that creating a positive IP protection environment is not only important to protect the rights of foreign companies
collaborating with their Chinese partners, but also critical to foster a creative environment for technology advancement of Chinese companies.

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All information in this report is verified to the best of our ability and is assumed to be correct at time of release; however, Klako Group does not accept responsibility for any losses arising from reliance on the information provided within.

Interview with Mr. Franz Weinberger, the Chief Representative of Otrish GmbH

With our headoffice in Linz, Austria and our own sourcing office in Shanghai, China we concentrate on supplies of steel pipes and tubes from Asia (primarily from China, India, Iran, Turkey) to our customers
in Europe, America and The Middle East. We also stock some types of steel pipes ourselves in Austria.

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