Taiwan and Mainland China: Problems and Prospects in Cross-border IP Issues

By John Eastwood Wenger Vieli Belser, Taipei

IP rights holders looking at Asia-Pacific enforcement budgets often have to make hard decisions about where to take action. Although Taiwan's population is small (about 23 million), it is known to play a major role in financing massive overseas infringement in China and Southeast Asia. Taiwan is still a major manufacturer of fake optical-media products (CDs, DVDs, CD-ROMs), auto parts and high-tech products involving infringement of patents and misappropriation of trade secrets.

Following on the heels of general economic trends, many Taiwan manufacturing operations have packed up and gone across the Taiwan Straits, or to Thailand, Vietnam and Indonesia. For a variety of business and cultural reasons, Taiwanese investment has been increasingly focused on China. In 1999, according to official figures, investment into China amounted to only 27.65% of Taiwanese total overseas investment; by 2002, the figure had increased to 66.6%. Depending on the source of the figures, an estimated 500,000 (official) to one million (unofficial) Taiwanese now live and work in China. Most Taiwanese run manufacturing facilities in Shenzhen, Dongguan and Xiamen; another major centre of the Taiwan community is the greater Shanghai region, where an estimated 300,000 Taiwanese now live.