25 Mar
2021

Sector overview

One of the biggest differences with the patent rankings in China compared to many other countries is the extent to which the top 100 is dominated by universities and research institutes.

That is not to say those bodies do not play an important innovation role in the United States or major European countries – they clearly do, just not to the extent of China’s giants of higher education and research. As Figure 2 shows, research entities comprise just over one-third of the top 100, confirming the importance of the likes of the Chinese Academy of Sciences, Tsignhua University and Zhezhiang University to China’s innovation machine. One interesting thread to follow will be the extent to which that share of the top 100 changes now that some government patent subsidies are set to end in four years.

Elsewhere electronics, automotive, software/internet services, semiconductors and telecoms are all seeing major patenting activity. As was pointed out earlier, foreign entities contribute widely across electronics and automotive, while software/internet services and telecoms are dominated by Chinese entities.

A year-on-year comparison for granted patents indicates that electronics is catching up locally, with the space still dominated by domestic players such as State Grid Corporation. Such has been China’s rapid economic and technological growth over the past 10 years that a local player can emerge in an area like electronics and become a significant patent force in a relatively short time frame. Xiaomi is a case in point. Within a decade, it has carved a name for itself as a smartphone manufacturer, more recently broadening its business to home appliances and more. Recent reports of the company’s interest in the auto space underline the extent of its ambitions.

One clear example of government intervention in the invention landscape is the High and New Technology Enterprise (HNTE) Policy, which aims to direct research to specific areas by offering innovation tax incentives or subsidies. Policies and incentives are formulated both nationally and locally. The technology areas under HNTE are as follows:

  • Electronic information – software technology, microelectronics technology, computer and network technology, communication technology, radio and TV technology, new electronic components, information security technology and intelligent transportation technology.
  • Biology and new medicine – medical biotechnology, traditional Chinese medicine, natural medicine, chemical medicine, new dosage forms and preparation technology, medical instrument technology, equipment and medical special software, light industry and chemical biotechnology.
  • Aerospace – civil aircraft technology, air control systems, a new generation of civil aviation operation assurance systems, satellite communication application systems and satellite navigation application service systems.
  • New materials – metallic materials, inorganic non-metallic materials, polymer materials, biomedical materials and fine chemicals.
  • High-tech services – generic technology, modern logistics, integrated circuits, business process outsourcing, cultural and creative industry support technology, public services, technical consulting services, sophisticated and complex mould design, biomedical technology and industrial design.
  • New energy and energy saving – renewable clean energy technology, wind energy, biomass energy, geothermal energy utilisation, nuclear energy and hydrogen energy, new high-efficiency energy conversion and storage technology, and high-efficiency energy-saving technology.
  • Resources and environment – water pollution control technology, air pollution control technology, solid waste treatment and comprehensive utilisation technology, and environmental monitoring technology.
  • Advanced manufacturing and automation – industrial production process control systems, high-performance, intelligent instrumentation, advanced manufacturing technology, new machinery, power system information and automation technology, and automotive industry-related technologies.

Table 1. Overall granted patents in China for the top Chinese players in a selection of sectors compared with overseas entities

 China dominance over foreign entities grantsMajor Chinese contributing entities
Electrical3.4 times moreState Grid China, Midea, Gree Electric
Chemicals~8.7 times moreChina Petrochemical Corporation
Energy1.2 times moreChina National Petroleum Corporation
Software/internet services~2.8 times moreTencent, Alibaba, Baidu, Tsinghua Unisplendour, 360 Security Technology
Telecoms5.8 times moreHuawei, ZTE, China Mobile

New areas added to the list include cloud computing technology, mobile internet, encryption technology, e-commerce and modern logistics, inspection certification and standardised services, supportive technologies for cultural and creative industries, natural disaster monitoring and alert and emergency solutions.

Other policies similar to HNTE cover technology advanced service enterprises and tech-based SMEs.

It is thus unsurprising that government-backed machinery is churning out innovation from all sides. These policies are designed to encourage not only the corporates but also research institutes and universities to actively participate in the patent market. They also promote collaboration between corporates and research entities.

Figure 1. Number of players from the top 100 in China across each sectorwith overseas entities

Figure 2. Overall granted patents in China for the top 100 players across each sector

Figure 3. Sectoral trends for the top 100 entities