Chinese patent explosion factors: An empirical analysis based on system and policy

China's patent application has been rising tremendously, since its patent system was preliminarily built in 1985 represented by the issuing of its Patent Law. China has surpassed Japan in 2010 and US in 2011 to be the largest patent applying destination country with an annual rising rate of over 25%. Patent production and application are very complicated social and economic phenomena, and influenced by many factors. In this study, we tried to explain Chinese patent explosion by empirical analysis on the view of system and policy. The system and policy factors include national patent system reformation, patent subsidy policy, high-tech enterprises certification, patent intermediary service, patent pledge financing, intellectual property management of governmental S&T programs, and intellectual property pilot and demonstration project. Non-parameter tests and correlation analysis have been applied to discover and distinguish the impact of these factors. The result shows that even endogenous factors as capital (R&D fund) and labor (scientists) basically decide the maximizing amount of patentable technology, exogenous factors as institution and environment could also play a very important role in patent rising respectively. Patent system, patent subsidy and intellectual property management are the most important factors, however, patent pledge financing's influence is limited relatively.