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State Council strengthens IPR protection

Updated: Dec 9,2015 9:02 PM

Premier Li Keqiang chaired a State Council executive meeting on Dec 9, which considered a supervision report on State-owned enterprises (SOEs) and urged further upgrades, finalized the reform details on protecting intellectual property rights and approved draft laws on stock issues and Chinese medicine.

Giving SOEs credit for their progress, the meeting also identified the improvement of quality and efficiency as the main focus in the next two years.

Firstly, SOEs should beef up innovation centered on market demand and increase supplies to boost efficiency. More professional platforms for innovation and entrepreneurship should be established to promote cooperation between competitive industries and research institutes, which can jointly form corporate groups. New industrial forms such as Internet Plus should be developed following breakthroughs in emerging industries and key technologies. The entire industrial chains such as high-speed rail, nuclear power and intelligent grids are also encouraged to go abroad.

Secondly, SOEs will be reshuffled in different categories. Enterprises that cannot meet national requirements on energy, environment, quality and security, as well as those in industries that show excess capacity and continuous deficit, will be forced to suspend operation and be restructured. Enterprises that have been in deficit for three years and do not meet the restructuring requirements should be asked to reorganize assets, transfer property or close down. It is expected that by the end of 2017, the deficit volume of operating enterprises will be reduced markedly. SOEs should also refrain from investing in industries plagued by overcapacity, moving instead to sectors that are key to national security and economy.

Thirdly, SOEs should enhance its management efficiency. Enterprises should make efforts to clear stock and accounts receivables, and curb unproductive expenditure. The meeting also required enterprises to cut management levels and explore interaction between salary and performance, which is expected to enhance incentives for raising corporate efficiency. SOEs are encouraged to employ management personnel in a market approach.

Fourthly, the meeting urged the speeding up of reform on mixed ownerships to strip social functions from enterprises. Supplies of water, power and heat, as well as property management will be separated from enterprises nationwide starting from next year.

Fifthly, the government will devise new policies to support the initiative. The country will further implement policies for commercial banks to handle bad assets and strengthen examination on doubtful and bad debts in industries with overcapacity.

The meeting also received reports by a supervisory committee on the examination of SOEs and urged effective measures to maintain and increase the value of state assets.

China will also strengthen the protection of intellectual property rights (IPR). Punishment should be intensified for the infringement of IPR and the rights protection mechanism should be improved, Premier Li said. The intentional infringement of IPR should be included in the credit history for both enterprises and individuals, he added.

Premier Li asked to simplify review and registration processes for IPR which can be registered, applied for and reviewed online to reduce the patent application and maintenance fees, he said.

An invention and patent license system should be improved to strengthen IPR protection in new sectors such as e-commerce and big data. The IPR evaluation system of big economic activities was put forward to improve the innovation efficiency.

Tax and financial policy support should be strengthened to protect IPR. The meeting also discussed establishing a platform to operate businesses related with IPR.

The meeting also discussed a draft amendment to the country’s Securities Law, which proposed revising the current approval-based IPO mechanism into a registration-based one at Shanghai Stock Exchange and Shenzhen Stock Exchange within two years after the draft is approved.

At the earliest the draft will pass the country’s top legislature at the end of this month to finish the required legal procedures, a precondition before any changes to the IPO system are made, experts said.

Following legislative approval, related government organs will work out detailed regulations regarding to the implementation of the new IPO system and supervision required after the listing, according to a statement released after the meeting.

Meanwhile, a draft of the Traditional Chinese Medicine (TCM) Law was also passed. The draft has made regulations for herbalist doctors and clinics to access to TCM. Regulations for TCM management and talent training were also made.