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Chinese Investments are increasing into US Firms

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Published on : Jun 22, 2015

Chinese companies are increasing investments in the U.S. research labs to gain patents. The move is being seen as China’s focus to become a driver of innovation. According to an analysis of the global intellectual property database of Thompson Reuters, the big Chinese enterprises such as Huawei Technologies and ZTE Corp. are increasingly gaining patents ranging from internet infrastructure to new software with the help of the U.S. researchers. 

A decade ago, the involvement of Chinese firms in the American research enterprises was almost nil. The increasing investments of Chinese firms in the U.S. research labs will be one of the key topics discussed at security and economic talks between the top Chinese and the U.S. officials this week. The officials are working on a bilateral investment treaty which might help in deepening the ties between the two nations amid the tensions over China flexing its military muscles. Even in the absence of the treaty, China has been generously investing into the U.S. research houses. 

According to the data presented by Thompson Reuters, patented inventions by Chinese firms with the help of the U.S. researchers increased to 910 in 2014. For example, Humanwell Healthcare Group, a China-based drug firm has invested over US$50 million into a research subsidiary located in New Jersey. The U.S. researchers employed by Humanwell are not focussing on developing new medicines. Rather, they are working on how to introduce some of the drugs as pills in place of injections. Vincent Xiang, the head of international investment at Humanwell, revealed that so far, the group has won approval on four patents in the European Union and the U.S. 

Huawei Technologies has six research centres in the U.S. and is a small player in the U.S. telecom infrastructure market, owing to the restraints posed by the U.S. security agencies. The state and the local governments in the U.S. are trying to attract the investments made by the Chinese firms which would flow more easily post the investment treaty between the two countries.