China has the world’s second largest economy. Few businesses would turn away from its practically limitless potential, or so it would seem. But many do, avoiding this market altogether, or more commonly merely tiptoeing into the market with an effort that pales in comparison to other regions, such as Europe, the Americas and other Pacific-Rim countries. Intellectual Property is often cited as the main barrier to entry for many such businesses and unfamiliarity with the Chinese legal system is chief among the cited concerns.

The other major concern, of course, is enforcement. The statistics concerning Chinese counterfeits are staggering. In 2010, illegal exports from China and Hong Kong accounted for 80 percent of all seizures at U.S. ports, with a total value of $1.1 billion. Further estimates provide that 20 percent of all consumed goods inside China are also counterfeit. Despite these sobering numbers, improvements continue. The enforcement side of China’s legal system, however, is left for another article. Here, we discuss the patent aspects of China’s Intellectual Property system, because clearly, without first obtaining Chinese-based Intellectual Property rights, one does not even have the luxury of worrying about enforcement.