The Protection Of Intellectual Property Rights,the Import Of Intermediate Products & The Competitiveness Of China’s Foreign Trade

Traditional endogenous growth theory suggests that technological progress is the main driving force for economic development and growth.Technical progress is inseparable from the accumulation of knowledge.At the present times,since science and technology have been primary productive forces,knowledge innovation and intellectual property have become a very important resource in the globalized knowledge economy era.As a carrier of knowledge,products and services circulate among countries by international trade.The production status and benefits of a country in global production process are determined by its knowledge innovation.Intellectual property rights and intellectual property protection play an important role in the promotion and strategic transformation of a country’s foreign trade.The implementation of "Agreement on Trade-Related Aspects of Intellectual Property Rights"(TRIPS)had a very significant impact on the economic growth and foreign trade development of developing countries.On the background of TRIPS Agreement,what kind of intellectual property protect policy developing countries should take has become a key factor that determine whether the country can overcome the technical dilemmas to promote long-term economic growth and the enhance of foreign trade competitiveness.China is a large export-oriented developing country,and the rapid growth of foreign trade since the reform and opening up has brought prosperity and economic development.In 2013,China has surpassed the US and has been not only the world’s largest exporter of goods,but also the wor ld’s second largest importer.The development of foreign trade has driven the economic growth prominently.In 2010 China’s GDP surpassed Japan and became the world’s second largest economy.With the development of communication technologies and transportation costs declining,economic globalization continue to be strengthened,the nature of international trade has undergone great change: the situation that the export goods production are completed in a single country traditionally has been replaced by the new international production system which involves in many countries with worldwide production and production tasks division.In the global production network and the framework of the TRIPS Agreement,the study of the relationship between intellectual property protection and foreign trade competitiveness has great practical significance in making reasonable intellectual property protection strategy to better promote China’s foreign trade competitiveness and long-term stable economic growth.Existing studies pay more attention to the developed countries whose intellectual property protection systems are comparatively perfect,rather than the developing countries whose intellectual property protection is relatively weak.What’s more,there are little study on the impact of intellectual property protection on trade competitiveness.Based on the perspective of global production network,under the analytical framework of endogenous growth theory and the new trade theory,this paper examines the market expansion effect and market monopoly effect of intellectual property protection on the imports of intermediate goods,and further with theoretical and empirical analysis the mechanism of intellectual property rights affecting trade competitiveness through intermediate goods imports is investigated.With the specialization of international production division,there are drawbacks in the traditional trade competitiveness evaluation index which uses gross trade as caliber,and the trade competitiveness evaluation index bas ed on value-added is more scientific and reasonable.The traditional foreign trade competitiveness is the ability of a country’s tradable goods,industry and enterprise engaged in trade to develop new markets and gain profits in the open foreign markets.In the global production network,along with the blowout of intermediate goods trade,the global value chains has been a new international production system with many countries participating,production task division and worldwide production,which determin es that a country only participate in certain aspects of the export goods production and gain the business profits of these value-added aspects.Therefore,the foreign trade competitiveness under the background of the global production network cannot be fu lly reflected by the traditional trade competitiveness estimates such as the revealed comparative advantage index,the revealed competitive advantage index and the trade specialization index.To improve it,based on the added value trade data and from the perspective of the value chain,the fact that global production and distribution is taken into consideration to measure a country’s foreign trade competitiveness index,which can reflect a country’s trade competitiveness more accurately,scientifically and reasonably.Overall,China’s foreign trade competitiveness based on global production network is gradually improving,and there is a big difference among industries.The overall foreign trade competitiveness of manufacturing is gradually increasing,where labor-intensive manufacturing has strong foreign trade competitiveness,but shows a downward trend.Meanwhile,the foreign trade competitiveness of knowledge-intensive manufacturing is relatively low but showing a clear upward trend,which will be the main focal points to enhance the foreign trade competitiveness of manufacturing.The competitiveness of capital-intensive manufacturing industry is relatively stable and remains to be further mined and upgraded.The Foreign trade competitiveness of the primary sector gradually declines,indicating that the improving of the productivity of Chinese agriculture and extractive industries is slight.With the gradual accelerating of the future industrial structure upgrading,the proportion of exports in the primary sector is still gradual declining than that in manufacturing and services and its international competitiveness for some time will continue to show a downward trend.The proportion of the service sector in the GDP is growing,but its foreign trade competitiveness is still not clear and needs to be further improved.Based on gravity model,a theory on the mechanism of intellectual property protection and intermediate goods imports is constructed.We find that there is a linear relation between the degree of intellectual property protection of the importing country and its imports volume of intermediate goods and that the effect of strengthening the intellectual property rights protection on intermediate goods imports depends on the game of "market expansion effect" and "market monopoly effect".Intermediate goods imports contribute to enhance foreign trade competitiveness in three ways.First,it brings a certain degree of technology spillover by increased investment effect,demonstration and imitation effect and competition effect of intermediate goods and capital goods.Second,corporate’ productivity is enhanced by compensating channels and technology transfer channels.Last,the welfare of producers is improved through the promotion of production specialization and the optimal allocation of resources.The market expansion effect of China’s strengthening IPRs protection on intermediate goods imports is dominant.Using the cross-border data of China and other 39 countries and regions,the empirical results find that the effect of intellectual property protection(IPP)on Chinese intermediate goods imports is positive and the coefficient is large and is significant at 1% level,indicating that the market expansion effect of China’s strengthening IPRs protection on intermediate goods imports is dominant.The strengthening of IPR protection will bring more and and better intermediate goods imports.Intellectual property protection plays a significant positive role in promoting for foreign trade competitiveness through intermediate goods imports.According to the industry-level data,results of an empirical analysis via regression model show that the regression coefficient of the cross term of intellectual property protection and intermediate goods imports is 0.32 and significant at 1% level,which indicates that the intellectual property rights protection by intermediate goods imports had a significant positive impact on China’s foreign trade competitiveness.Improving IPR protection has a significant role in promoting China’s foreign trade competitiveness.Meanwhile,there are obvious characteristics of the industry on the effect of IPR protection on trade.In particular,the impact of intermediate goods imports and the IPR protection on various sectors’ foreign trade competitiveness is different.The trade competitiveness of technology-intensive industries is the most sensitive to the cross term and that of the labor-intensive industries is the smallest.The main conclusions of this paper provide strong policy implications for China and other developing countries.On the one hand,gradually raise the level of intellectual property protection and make strategic IPR protection policies to suit the level of their economic development.Establish and improve IPR-related laws and regulations and strengthen their enforcement.Industry and regional differences of intellectual property protection should be noted.On the other hand,strengthen the promotion effect of intellectual property right protection on the intermediate goods imports,and get rid of intermediate goods import barriers to promote high-quality,high-tech intermediate goods imports.promoting human capital and establish early warning mechanisms of intellectual property to bring the cooperation mechanism of intellectual property protection and intermediate goods imports into play and enhance foreign trade competitiveness.