Labubu test will not be child's play

China is facing a new problem as it enters the Year of the Horse today. Accustomed to blithely violating intellectual property (IP) rights for decades, it now must try to stop copycats from stealing its ideas. Labubu, a 6-inch doll created by Chinese toymaker Pop Mart that has become quite the rage, is spawning an army of knockoffs. Officials are cracking down in typical Chinese fashion on fakes, but the larger question remains: will this latest outbreak of copying alter Beijing's attitude towards IPR protection? The short answer is no. China has too many factories chasing too few ideas. A winning product will find its way onto the shop floors of competitors. It doesn't matter who came up with the successful notion in the first place.

There are areas such as electric mobility and RE where China has made serious technological advances that need protection globally. It is, by some accounts, rapidly closing the gap with the US in the AI race. These are endeavours that need a robust IPR regime. China's research output has surged qualitatively and quantitatively, and one of the factors that help sustain the momentum is copyright protection. But the regime must be uniform. There can't be one set of rules for high-end manufacturing and another for toymakers. Policymakers will have to get a fix on the issue if they intend to pursue an investment-led growth strategy that creates excess manufacturing capacity.

The amount of technical innovation happening in China calls for a stronger global IPR framework. The easy option would be to harmonise the Chinese regime with that of other advanced economies before the former acquires technical superiority across a broad spectrum. But the Chinese economy is in transition and may find it difficult to adjust to a new order. Chances are China's leadership will protect strategically important technological advancements while ignoring the travails of toymakers.