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Capactiy Development of Chinese Business on IPR Compliance

This UNDP public private partnership initiative aims at assisting China in its effort to better address the counterfeit issue in China which is one of the key challenges in the IPR area. It is suggested by the UNDP that the businesses and local chambers of commerce or similar institutions should play a much bigger role in this effort. UNDP has been working closely with the Quality Brand Protection Committee (QBPC) of over 70 multinational companies operating in China. A survey has been conducted at one of the anti-counterfeiting "hot-spots" in Fujian province to assess the root causes of the issue among the business community and local chambers of commerce or similar institutions. The survey team was tasked to come up with a model on how to best support China's effort through capacity development of the local businesses and chambers of commerce.

Background
Compliance with Intellectual Property Rights (IPR) is going to be crucially important for China's credibility as a member of the WTO. China has made great effort on IPR protection. Many laws have been updated. Some legal personnel have been trained to handle dispute cases.

Despite of all these efforts, there exists a gap between the updated laws and the effective enforcement of those laws. With increasingly fierce market competition, enterprises are facing challenges from both IPR compliance and stricter requirements for environmental protection. The unprecedented economic growth in China has led to a surge in counterfeiting that, in terms of size, scope and severity, appears to have no parallels in history. These illegal activities have seriously hit both domestic Chinese companies and many well-known brands including multinationals in China reducing their profits and destroying their trademarks. The conflict between economic growth and environmental protection prevails in China.

The Problem to be Addressed
UNDP sees the need to assist the government to better address the issue from these perspectives. First, it is an issue of level playing field to prepare China to gear up with international practices and respective requirements. Second, there is a need to further raise the awareness of the updated IPR and environmental laws among the business community in China. UNDP is of the view that business associations, chambers of commerce and business at grassroots level should and could play a much bigger role and relieve government of much of its responsibility at the local level to support IPR compliance.

The Approach
In close consultation with the private sector Coalition of QBPC and the government, the UNDP-supported survey in one of the counterfeiting "hot spots" in Quanzhou, Fujian province came up with some key findings. The survey report by two topnotch national consultants revealed that Quanzhou city has undergone an evolution in thinking about IPR protection which has gained some useful and initial IPR compliance experiences by local business associations. Experiences of IPR compliance in Quanzhou demonstrates that there has been an active participation of local business associations in working together with the government to help raise the awareness of local businesses on IPR enforcement. One example of it is the Toys Trade Association of Anhai Town which plays a crucial role in helping promote its members' products and by setting up regulations to be abided by all its members. Violators will be prohibited from exhibition at the Trade Guild and their membership status will be removed. The report recommended that Quanzhou's experience could be shared more widely in China or used elsewhere as a demonstration model.

UNDP, QBPC and the government have reached the consensus to forge partnerships to assist the capacity development of local business and business associations by using Quanzhou as a model.

A training package will be developed which would be used locally and then more broadly in China reaching out to business and business associations
Educational activities such as workshops or seminars will be implemented by an NGO such as China Association of Chamber of Trade and Industry. Such training will run on a fee basis.
A publication will be created to include the best practice of Quanzhou as a show case which will be widely distributed in the business community in China.

Partners

Quanzhou city government and businesses expressed support by sharing experiences and best practices.
Fujian provincial government will provide necessary support in facilitating the preparation of training packages and distill the Quanzhou experience.
UNDP will mobilize financial resources from QBPC, manage the project and find matching funding.
The Quality Brand Protection Coalition has pledged to provide US$100,000 for the project. A cost-sharing agreement will be signed between UNDP China and QBPC for QBPC's financial commitment.
China National Center for Economic and Technical Exchanges (CICETE) will be the executing agency.
The China Association of Chamber of Trade and Industry is expected to be the partner for the implementation of the project.

Timeframe
The first phase of the project will be from November 2001 to December 2002.

Results to be Achieved

Capacity development of local business associations in localities as wide as possible through demonstration of Quanzhou's model to help raise the awareness of key IPR and environmental legislation which will strengthen enforcement of legislation.
Assist in creating a better level playing field for enhancing the rule of law.
Experience of the project be brought to the attention of the top level authority in China for replication in other localities in China.

For More Information, Contact:
Luan Liying, UNDP China
E-mail: [email protected]
Phone: (8610) 6532-3731 ext. 253
Fax: (8610) 6532-2567