Zhongguancun Development Group, a state-owned enterprise founded by the municipal government of Beijing, will spend $10 million to create a local “incubation centre.” This is designed to give local companies a chance to sell their technology to firms in China.
The announcement comes amidst increasing concern on the part of Canadian firms that they’ll enter the Chinese market only to have the technology they’ve spent years developing stolen from them once they arrive.
However Chinese officials believe it’s also up to local companies to do their research ahead of time so they know what they’re getting into.
“When the Canadian companies make an investment in China, they need to have a well-prepared (plan) of how to protect their intellectual property rights,” said Qiming Wang, a science and technology counsellor with the Chinese embassy in Ottawa.
“Sometimes they find problems because they don’t get well-prepared before they go into China.”
An important component of this involves knowing what to do when an intellectual property problem comes up, he said, including knowing whether or not it’s necessary to go to court.
This represents a chance for China to overcome a reputation it developed when it didn’t do as much to protect intellectual property rights, said the head of Ottawa’s lead economic development agency.
“The reality is that China has some baggage from the days when they did not protect intellectual property,” said Invest Ottawa president and CEO Bruce Lazenby. “We know now they’re working hard to try and change that reputation and this is an opportunity for them to do that.”
He encouraged the companies that decide to do business in China to perform their due diligence before taking their technology overseas.
Mr. Wang insisted there’s another side to the coin, however, since Chinese companies regularly express concern about being treated equally when they open shop in Canada.
He cited misunderstandings about state-owned enterprises as an example. They should be looked upon as companies, he said, rather than as direct offshoots of governments.
Concerns about Chinese state-owned enterprises purchasing Canadian companies were raised during the China National Offshore Oil Co.'s bid for Calgary-based Nexen and led to new federal rules governing such takeovers.
The local branch of the world-wide organization will consist of a Chinese director and three locally-hired staff, Zhongguancun said in a news release. They will initially work out of the Invest Ottawa offices close to Preston Street but hope to eventually move to a bigger space.
Zhongguancun has already met with seven companies during their day-and-a-half of operation, Mr. Lazenby said.