A rising number of Chinese firms are investing in research and development (R&D) in U.S. labs in an effort to generate patents as well as get new ideas for China’s shift from being a manufacturer to a driver of innovation.
Reuters said that some Chinese firms like Huawei Technologies and ZTE Corp., which were not active with American research centers 10 years ago, are now making use of U.S. researchers to create patents.
According to the report, economic and security talks between top Chinese and U.S. officials will be held on June 23 and 24 in Washington, in which the rapid growth of Chinese investments in the U.S. will be a key topic.
The two countries will be negotiating a bilateral investment treaty, which is expected to enhance the ties between the world's two largest economies.
Reuters's global intellectual property database showed how much capital Chinese firms are pouring into U.S. research and asset acquisition even without a treaty. Although some of its firms are still newcomers in U.S. investment and few work on the technological frontier, the data indicated what China envisions to become an advanced economy.
The data also showed that patented inventions by Chinese firms involving a U.S. researcher have almost doubled worldwide in each of the last three years, reaching 910 in 2014.
Despite this, the product of China's R&D in the U.S. is still modest compared to the large quantities of patents coming from the U.S. each year, and direct investment between the two countries is also remarkably low.
According to U.S. data, the U.S. foreign direct investment (FDI) in China makes up only over 1 percent of the FDI poured into Chinese businesses by all nations, and most FDI in China comes from other Asian countries.
On the other hand, China's share of U.S. FDI stock is even smaller, although it has been growing rapidly in recent years after the government eased the limits on investment outside the country.
The Reuters data also showed a sharp increase in patents by Chinese firms using German and Japanese researchers.
The Chinese National Patent Development Strategy outlines the country's plans through 2020, with focus on seven strategic industries that have been identified for growth: alternative energy, biotechnology, clean energy vehicles, energy conservation, high-end equipment manufacturing, high-end semiconductors, and broadband infrastructure.