Reformation of The Dragon's Country 

An article by Iman Sjahputra, SH, SpN, LL.M.

The Chinese economic resurgence is very amazing. The country formerly called as Bamboo Curtain must be proud with its various straighten out to increase its economic. China, the country residing in the East Asia, is indeed will become one of the world economic leaders. China has shown his resurgence to the industrial and developed countries.

With its economic growth between 9% to 9.5% per year, China has proved their reform movement success. The economic growths also successfully provide jobs for 10 million citizens as new comer jobseekers and minimize the number of the unemployment in the country. The dragon country with the population of 1.3 million people presently is estimated to borne 200 million middle class people with a remarkable purchasing capability.

From the market point of view, China will be the target of every businessman. The coming of consumer’s products such as cellular phones, LCD TV, cars, luxurious motor cycles, computers, DVD, VCD, video tapes, furniture, textiles, etc is the evidence.

China is the biggest consumers of cellular phones in the world, more than Japan and America, where it is predicted that at this moment the use of the cellular phones could reach to 350 million people and estimated that this number will increase into 600 million cellular phone consumers in the year of 2009. Based on this condition it certainly will tempt every investor such as Motorola (United States) and Nokia (Finland) companies to have the investment in the information technology field.

Besides that in the manufacturing field such as car factory which is predicted that there are about 3 million unit cars are released in the market per year. So there is no doubt for companies like Toyota (Japan), General Motor, Chrysler (United States) and Volkswagen (Germany) have done the investment in China for a very long time.

Of course it is very normal if it makes us wonder about the China’s incredible that makes their products could be sold world wide and have invited many foreigners to do the investments in China in this very short time. For foreign investment of 2005 the China has reached US$ 60 billion foreign investments (compare with the foreign investment capital of the world that reaches US$ 897 billion in the year of 2005).

The coming of foreign capital cannot be separated from the policies apply by the Beijing government to pull the foreign investments. Investment regulations have been clarified in the catalogues for examples for the certain projects such as mining, gas, oil distillation and agriculture can be applied only in the western part of China. Special zones for investments are built and opened for foreign business only with several of exemptions such as tax, import, export or various profits exemptions are applied within certain period of time.

Further the tax incentives have been loosen up and applied more and to support all of these amenities the China’s government has built related facilities. Infrastructures such as roads, high/toll and harbors are constructed by emerging the mountains and cutting down the forests and dredging up the ocean.

These facilities are supported with the strict laws and law enforcement. For instance the various infringements of Intellectual Property Rights (IPR) not only settled upon mutual concessions but also brought to the civil and criminal lawsuits. The foreigners’ efforts to get compensation from the local company have reaped the outcomes. The “Silk Market” case that set the obligation from the owner/tenant of the building to be also responsible for the IPR infringement of 5 famous brand companies of Burberrys (England), Gucci (Italy), Louis Vuitton Malletier (France), Prada (Luxemburg) and Channel (France) to be sentenced to pay the compensation in the amount of Yuan 20.000. This is one of the evidence of the consistency of the law application and enforcement.

The seriousness of the Beijing government in handling the IPR infringements cannot be separated from the Chinese’s participation as one of the WTO member that affected its trade status.

A case that recently filed to WTO by the United States government against the Chinese government with respect to the copyright infringements of movie and recording industries will become a contention arena to determine the ‘”watch list” or “priority foreign country” status that can be imposed against Beijing.

The commerce sanctions will be imposed to China if it is proven that China has breached the IPR. The government’s efforts to minimize the IPR infringements by the various and sensational verdicts such as the closing of the fake products market (Xiang Yang Market in Shanghai) and the annihilation of imitation and pirated goods.

Are the inventors of IPR have satisfied with the actions taken by the China? For that reason it will be very interesting if we wait for the new chapter of the enmity between the United States and China in WTO.