Chinese Government Not an IPR Monolith

Fellow blogger, Micah Sittig, recently took us to task in a comment to our Property Protection -- China is Getting Serious" post.  Mr Sittig, who appears to be a Westerner teaching in Shanghai, noted as follows: 

Be careful not to fall into the view of a monolithic China. It is in the Chinese government's best interest (and therefore the Party's as well) to promote IPR protection as an economic driver, but there are still large segments of the population who will not benefit from IPR protection just yet.

Good point and one on which I completely agree.  I actually discussed the decentralization of China's government in a different context, here.  In that post, I went quite far in emphasizing that what radiates from the center of China's government is not always what happens elsewhere in the country:

I particularly like the Asianist's comment that "China is much more decentralized than people assume."  In a recent article, Spiegel Online (part of the big German news magazine, Der Spiegel), put it even more bluntly:  "Provincial officials and managers customarily ignore edicts issued by the planners in Beijing."

Even Spiegel Online (though correct on the result) is wrong to think local officials consistently ignore Beijing.  The reality is that Beijing has quite intentionally and quite clearly given local governments authority over approval of the vast majority of business projects in their respective locales.  Since local authorities have this power, their actions are actually consistent with central government policy.

I am convinced one of the primary reasons so many believe Beijing controls all foreign business in China is because so much is written about its control.  James McGregor's excellent book, One Billion Customers, is a classic example of this.  Most of the examples in the book involve Beijing governmental interference, yet that is because most of the examples involve huge projects that have the potential to invade the government's turf, like setting up a nationwide television station, a nationwide cell phone service, and a nationwide press service.  It just is not a story to write about how a Pizza Hut opened in Xiamen or a Carrefour opened in Qingdao without any influence one way or the other by Beijing.  Additionally, so much of the press on China comes from Chinese mega-cities like Beijing, Shanghai, and Hong Kong, which have an incentive to propagate their own importance. 

Decentralization in China is a fact and the smart foreign business starts local and then radiates outward only when necessary.  In our representation of SMEs in China, we rarely deal with Beijing at all. 

Though Beijing has for the most part come to realize enforcement of intellectual property rights makes sense for China, it is indeed less clear that the provinces have that same conviction.  Mr. Sittig correctly notes that "there are still large segments of the [Chinese] population who will not benefit from IPR protection just yet," and as long as that remains the case, the threat of uneven IPR enforcement is a very real one.