The explosion in Chinese patent applications results partly from the nation’s emphasis on R&D.
China’s telecom giant, Huawei Corporation, increased R&D spending by more than 25% in 2012, to $4.7 billion, and holds more than 50,000 patents worldwide. China’s other telecom giant, ZTE Corp, invested $1.4 billion in R&D in 2012 and led the world in PCT filings for the second straight year, with more than 3,900 applications (32% more than second-place Panasonic). Overall, China spends almost $300 billion on R&D, second only to the U.S., with one recent study predicting R&D spending in China will exceed that of the U.S. by 2023.
Additionally, China, Japan and Korea are more efficient at converting R&D dollars into patents than U.S. or European countries. According to the World Intellectual Property Organization (WIPO), for every million dollars spent on R&D, Korean entities apply for 3.7 patents, Chinese 3.5 patents, Japanese 2.9 patents and Americans just 0.9 patents.