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C3S Members’ Corner: 02/2020
The current pandemic related disruptions worldwide and China’s recent geopolitical moves have put under scrutiny, China’s vision of becoming a superpower and its journey towards attaining the same. The United States of America (“the US”), the current superpower, is facing intense competition from China to this effect. It is common knowledge that a superpower is a state characterised by its global dominance to a level that it has the ability to influence or project power universally. Such dominance is said to be achieved through a combination of various factors such as economic, military, technological and cultural strengths as well as diplomatic and soft power influence. At an unprecedented time like this, when the world’s economy has plunged to abysmal lows since the Great Depression of the 1930s, the COVID-19 pandemic has indirectly thrown light on China’s meticulous journey to becoming a superpower. In fact, China has already, in a way, proven its superpower mettle – it has not only been able to influence the world economy, bringing it crumbling down over a span of 4 months but has also been able to recover its own economy more efficiently and rapidly than most countries.
China’s spectacular growth, especially in relation to technology, was already discussed in detail in a previous article, which can be accessed at https://www.c3sindia.org/business-economics/intellectual-property-rights-in-china-and-global-implications-by-dr-vinod-surana/. The key to China’s growth has been its techno-nationalist approach that supports the local industry while keeping Intellectual Property (IP) at the core of the nation’s strategy. One may wonder how China’s growth is of any relevance at a time like this, with the pandemic wreaking global havoc and everyone’s focus being to find a solution to arrest the pandemic and revive the world economy. However, China’s economic recovery post-COVID-19 can be largely attributed to the very factors which have determined the country’s growth trajectory, thereby making it relevant to study.
China’s approach to the pharmaceutical & medical devices sector
China has always had ambitious growth plans. The Made in China 2025 Policy is a testament to the country’s motivated growth plan, the motto of the said policy being “global ambitions built on local protections”.[i] The said policy was released in 2015, identifying 10 strategic industries/priority sectors as the country’s focus area to improve indigenous research & development (R&D), of which biomedicine and high-performance medical devices are also one of the said sectors. Two of the bottlenecks identified by the Chinese President Xi Jinping for achieving self-reliance in the said sector were high reliance on import of high-end medical devices and heavy dependence on foreign companies for patented pharmaceutical drugs. Therefore, the strategy followed by China to advance its indigenous innovation capabilities in the medical devices sector was to use policies and guide funds for health institutions to participate in research, innovation and application of domestically produced medical devices, and provide an incentive mechanism for medical and health organisations to use domestically produced medical devices[i]. Another goal set by China to become internationally relevant has been to promote Chinese standards as international standards, including in the high-end medical devices sector, which it aims to achieve by the implementation of the Plan to Enhance Standardization and Quality of Equipment Manufacturing.[ii]
Therefore, over the years, China has systematically adopted various policies and practices to boost indigenisation while also becoming globally relevant. In fact, some of China’s techno-national policies were so extreme that they were a threat to open market competition and a hurdle to foreign entities trying to tap one of the largest consumer markets in the world. One such policy in the medical devices sector was restricting the public-owned hospitals to preferentially equip and utilise domestic medical equipment and apparatus.[i] Another policy directed government procurement projects to procure only indigenous products where domestically produced pharmaceuticals and medical devices could meet the required need.[ii]
Another daring technology plan of China, the Medium and Long-Term Science and Technology Plan (2016-2020), was largely based on China developing its indigenous capability and creating its IP through tweaking of foreign technologies. By virtue of implementation of the various techno-nationalist policies and plans, China has over a short span of time, successfully acquired foreign technology while simultaneously creating its own IP, which has greatly influenced its ability to fight the pandemic and revive its economy.
China’s road to recovery from the COVID-19 impact
It is a well-established fact that COVID-19 originated in China and then rapidly spread globally. However, China’s road to recovery has been the quickest, with China currently having low daily case numbers when compared to most prominent countries of the world. In fact, countries such as the US, Brazil, India, Russia, South Africa, the United Kingdom, etc. have surpassed China, either in the number of affected cases, or the death toll, or both. China has not only recovered vis-à-vis the containment of the pandemic but has also recovered economically to pre-virus levels, with the industrial production climbing by 4.8% in June.[i]
China’s scientific research relating to COVID-19
China not only had a head-start in the contracting and in the spread of the disease but also had a head-start in scientific research related to COVID-19. Of the many research papers about COVID-19 in international journals, most were written by scientists/ researchers from China, the interesting fact being that they were originally written and published in their local language.[i] The Chinese scientists/ researchers were therefore well acquainted with the epidemiology, clinical features of COVID-19 and the structure/ genetics of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) well before the rest of the world could fathom the same. China, realising its competitive edge, started asserting tight control over COVID-19 research findings. It quickly introduced policies requiring scientists to get approval from the Government to publish their results/ research findings relating to COVID-19.[ii] Therefore, although it is largely assumed that China’s quick recovery from the repercussions of the pandemic in comparison to the rest of the world is because of it being the first country to implement complete lockdown of the affected areas, the actual reason for such quick recovery should be predominantly attributed to the Chinese having a scientific/ technological head-start over the rest of the world.
China’s demonstration of its global dominance
China has remarkably reversed the popular perception that China is the world’s most sought aftermarket. China has now made the world it’s market! While most of the world is struggling to catch-up with the “new normal”, China has not only seamlessly transitioned through this phase but has also reversed the power play by:
selling medical equipment and devices such as testing kits, personal protective equipment, masks, etc. to wealthy economies from which it once-upon-a-time used to import technology for its local needs;
offering concessionary loans to countries with battered economies; and
distributing masks, testing kits, etc. to developing and underdeveloped countries.
As regards technological dominance, China has moved into the top position in the world, beating Japan and the US, as a source of international patent applications and patents granted, in the year 2019. China is also one of the five members of the coveted “IP5”, which is a forum comprising of the five largest IP offices in the world. China has dutifully used this forum to record its views on the need for advancing cooperation in IP protection during this special time, to jointly tackle the pandemic challenges.[i]
In light of the foregoing, it is apparent that the current situation has given China a major boost so much so that the country is pursuing intense geopolitical moves which may be interpreted as to its way of trying to use its current dominance to finally attain its vision of becoming a superpower. Although there are various dynamics that have led to this moment for China, one of the strongest deciding factors has to be its constant endeavour to develop and strengthen its technological dominance, albeit through unconventional and controversial ways.
(Dr. Vinod Surana is the CEO & Managing Partner of Surana & Surana International Attorneys. Dr. Vinod Surana was the only lawyer to be part of the Indian PM’s delegation to Japan in 2007 and to South Africa in 2008. He led several delegations under the banner of CII and FICCI to the Caribbean, South America & Israel to promote Indian diplomatic, political and business interests in that region. He has been sponsored for several training programs by the Governments of Germany, Japan and the United States of America specializing in the areas of law, management and technology. The views expressed are personal.
Ms. Aishwarya Vijayaraghavan is a Senior Associate in the Intellectual Property Law practice at Surana & Surana International Attorneys. She is a techno-legal professional with a Chemical Engineering & Industrial Biotechnology background and is also a registered Patent Agent in India. The views expressed are personal.)