Between Chinese culture and the rule of law: What foreign managers in China should know about intellectual property rights

Abstract

The purpose of this paper is to examine aspects of the social, cultural, political and legal architecture of intellectual property rights (IPR) in China. The paper aims to identify inhibiting and facilitating factors in the Chinese environment as they pertain to establishing of a workable regime for IPR in China. The paper also offers some practical strategies that foreign managers can employ to reduce the risk of piracy of intellectual property (IP) in China.Design/methodology/approach – A literature review of the main influences on the formation of Chinese attitudes to IPR are identified and discussed. Against this background, a model for the establishment of a new regime for IPR in China is proposed.Findings – While the cultural architecture of IPR in China is often identified as the major influence on the level of IP piracy, other aspects of the Chinese political, business and social environment may actually facilitate the acceptance of, and respect for, IPR. Indeed, the experience of Taiwan in building new norms for IPR suggests that a new regime for IPR in China is clearly possible. This is because new norms of respect for IPR can emerge when sufficient facilitating factors are present in the environment. Nevertheless, while the potential to reduce IP piracy exists, foreign managers must continue to remain vigilant in the marketplace and use a combination of strategies to protect IP as new norms of respect for IPR emerge in the coming period.Research limitations/implications – Foreign managers in China can gain significant advantages by understanding the deeper influences of the social, cultural, political and legal architecture on the formation of attitudes to IP and IPR in China. Through such knowledge, this group will be better equipped to contribute to the process of establishing new norms of respect for IPR in China in the medium term.Practical implications – This study contributes to the literature on IPR in China. Armed with this knowledge, foreign managers are better placed to negotiate the difficult and complex Chinese business environment.Originality/value – This paper presents a model for developing a workable IPR regime in China and describes low‐cost strategies to reduce the current level of IP piracy.