BUS 5040: EMERGING MULTINATIONAL

CORPORATION MANAGEMENT ISSUES

M ILES TO N E 2 : E X E C U T I V E A N A LY S I S O F E M E R G I N G
ISSUES

BABATUNDE ADELANI AFOLABI

NEXTFORD UNIVERSITY

DR SANDRA FONSECA
7TH FEBRUARY 2023
EMERGING ISSUES DESIGN HOLDING
EXPANSION TO CHINA
 Intellectual property
 Cyber Security
 Currency Fluctuation
 INTELLECTUAL PROPERTY

Intellectual property is the creative work of people's imaginative minds and their designs,
artwork, logos, symbols, and names.
Below are the types of intellectual property

 Copyright: The legal term "copyright" is used to indicate the ownership rights that
authors and artists have over their creative works.

 Patent: A patent gives the owner the authority to determine whether or how others
may utilize an innovation.

 TradeMark: A trademark is a symbol that can be used to separate the products or

services of one company from those of other companies.
CHINESE CHALLENGES TO INTELLECTUAL
PROPERTY RIGHTS
 Weak Protection: For a country like China, imitation (especially in technology)
boosts the production and consumption of commodities inside its society, which
offers short-term advantages.

 Weak Enforcement: In China, the enforcement of intellectual property is

frequently lax and inconsistent.

 Bottom Line: It's crucial to deal with a legal expert who is knowledgeable about
the area to safeguard intellectual property while conducting business in China.
MOST AFFECTED INDUSTRIES BY INTELLECTUAL
PROPERTY INFRINGEMENT IN CHINA
 Patent: The most impacted industries in China by patent infringements will be
those focused on research and development.

 Trademark: All businesses, regardless of industry, are impacted by trademark

infringement.

 Copyright: The industries most at risk from infringement are those that make
money off of protected content, such as those in the music, film, and software
sectors.

 Trade Secrets: This kind of violation can have an effect across a wide range of
businesses because trade secrets might include a variety of protected information.
ENFORCEMENT OF INTELLECTUAL PROPERTY
RIGHTS IN CHINA
 Negotiations: If the main objective is to encourage the infringer to quit infringing,
then choosing this strategy could save a lot of money.

 Administrative actions: In China, there are various governmental organizations

with the authority to retaliate against businesses that violate intellectual property
rights.

 Online infringements – Chinese law holds internet platforms accountable for

intellectual property violations if they are made aware of the violations and fail to
remove the links to the offending websites.

 Civic Litigation: A court case in Europe is comparable to a civil dispute in China.

Injunctions, damages, delivery up, and destruction (of tools/products) are the
typical remedies requested.
 CYBERSECURITY

Cybersecurity is defending technology, information, and control against malicious

activity to safeguard data, devices, and networks.

 China reported 12.9 million breaches in 2021, which is a substantial improvement

above the US (212.4 million), Iran (156.1 million), and India (86.6 million),
according to Surfshark.

 In a draft of its most thorough strategic plan for the cybersecurity industry in
China from 2021, the ICT ministry in China mandated that significant sectors like
telecoms dedicate 10% of their IT upgrade expenditure to cybersecurity by 2023.

 By 2023, the Chinese government projects that the cybersecurity market would be
worth more than RMB 250 billion (US$38.6 billion).
CHALLENGES OF CYBERSECURITY IN CHINA

 Because of the expanding organizational acceptance of digitization and the usage

of related technologies as part of company operations, cybersecurity incidents
have dramatically increased in China.

 Smartphone adoption is widespread in China. These smartphones use a variety of

apps that gather sensitive personal data. For example, apps for processing online
transactions make the Internet a very susceptible environment and expose users'
data to cyberattacks.

 An ever-increasing amount of information and data exchanges in the digital age

are handled by Chinese businesses. As the primary targets of cyberattacks at the
moment, these companies commonly experience data leaks due to organizational
system flaws.
MEASURES TO REDUCE CYBERCRIME IN CHINA

 The Cybersecurity Law (CSL), enacted on June 1, 2017, seeks to create a uniform
legislative framework for data protection and cybersecurity in China.

 All domestic and foreign businesses doing business in China must adhere to the
Multi-level Protection Scheme (MLPS), which goes into effect on December 1,
2019, as a cybersecurity compliance standard.

 The Data Security Law (DSL), which went into effect on September 1, 2021, was
designed to protect any data that, in the event of a breach, would have an effect on
China's social stability, economic health, or national security.
 CURRENCY FLUCTUATIONS

 Exchange rates govern the rate of exports and imports of goods on the world
market. Typically impacts foreign investors, particularly in the export and import
sectors.

 The currency movement of the exchange rate determines the domestic

commodities produced.

 Currency fluctuations determine the economy since they affect demand, price, and
purchasing power for goods.
IMPACTS OF CURRENCY FLUCTUATION IN CHINA

 Merchandise Trade :A weaker currency raises the cost of imports while lowering
the cost of exports for buyers abroad, which encourages exports. A country's long-
term trade surplus or deficit can be impacted by a country's currency, which might
be weak or strong.

 Capital Flow: Strong governments, vibrant economies, and stable currencies

attract foreign investment. For a nation to draw capital from international
investors, its currency must be comparatively stable.

 Inflation: For nations that are significant importers, a weakened currency might
lead to "imported" inflation.
MEASURES TO CONTROL CURRENCY FLUCTUATION
IN CHINA
 China's foreign exchange regulator claimed it has been pressuring banks to offer
businesses more robust risk-hedging services in light with increased yuan
flexibity

 Yuan derivatives are being promoted by the State Administration of Foreign

Exchange (SAFE) branch in Sichuan so that businesses will be "daring, willing,
and able" to hedge risks.

 According to the People's Bank of China, it has a wide range of tools, a lot of
latitude for policymaking, and "extensive expertise in efficiently controlling
market expectations and preserving currency rate stability.
ANALYSING THE HOME AND HOST COUNTRIES FOR
EXPANSION
 It is essential that companies without a principal address in Europe must have a
European Patent Attorney represent them during the entire patent application
process in Italy

 The "first-to-file" principle, which states that the first person to register a
trademark, patent, or other intellectual property (IP) will own the rights solely, is
also in effect in China (apart from copyright).

 Italy requires the Nice Classification for all national and international trademark
registrations. It was created in 1957 and is now widely used as a worldwide
system for registering trademarks and classifying goods and services

 The legal system is fully established, and decision-making is simple.

 ANALYSIS OF ITALY
 Italy requires the Nice Classification for all national and international trademark
registrations. It was created in 1957 and is now widely used as a worldwide
system for registering trademarks and classifying goods and services.

 It is essential that companies without a principal address in Europe must have a

European Patent Attorney represent them during the entire patent application
process in Italy.

 The Italian Patents and Trademarks Office, which offers all information pertaining
to applications for patents, trademarks, and designs in Italy, is the primary
organization for handling filings and applications.

 The trade secret law of Italy is regarded as one of the most effective in all of
Europe.
 ANALYSIS OF CHINA
 The entire system of intellectual property protection in China has recently
undergone changes, particularly as it relates to patents. A bilateral agreement
between China and the United States was reached on January 15, 2020, and as of
June 1, 2021, the new Patent Law of the People's Republic of China, which was
passed by the PRC National Congress on October 17, 2020, went into effect.

 The "first-to-file" principle, which states that the first person to register a
trademark, patent, or other intellectual property (IP) will own the rights solely, is
also in effect in China (apart from copyright).

 The legal system is fully established, and decision-making is simple.

 REFERENCE

 Cyberlands. “Top 14 Cybersecurity Breaches in China.” Www.cyberlands.io, 2019,

www.cyberlands.io/topsecuritybreacheschina.

 Peter, and Peter. “Challenges Related to Intellectual Property Rights in China.”

Trustiics, 30 July 2020, trustiics.com/intellectual-property-rights-challenges-china/.

 Reuters. “China Central Bank Says Will “Resolutely” Curb Big Currency Swings.”

Reuters, 11 Oct. 2022, www.reuters.com/markets/currencies/china-central-bank-says-

will-resolutely-curb-big-currency-swings-2022-10-11/.
 REFERENCE

 S.p.A, Jacobacci & Partners. “How to Protect Intellectual Property in Italy:

Laws, Offices and Strategies.” Www.jacobacci.com,

www.jacobacci.com/en/how-to-protect-intellectual-property-italy. Accessed 6

Feb. 2023.

 ---. “How to Protect Intellectual Property in Italy: Laws, Offices and Strategies.”

Www.jacobacci.com, www.jacobacci.com/en/how-to-protect-intellectual-

property-italy.

 Shira, Dezan. “China’s Cybersecurity Industry: A Market Analysis.” China

Briefing News, 26 Oct. 2022, www.china-briefing.com/news/chinas-