China IP: Why do the policies show a particular preference over banks?
Liu Zhengang: Because the key to small and medium-sized enterprises rests with banks. If banks are willing to lend, enterprises, however, are not willing to borrow, why not? Because they feel that it would be costly to pledge their IP to get bank loans. Therefore, our policies shall give a helping hand in interest payment of banks. Currently the main problem is that banks have too many worries. We know that banks are not willing to lend is a common phenomenon. The said measures are available across the country. The IP pledge loan turnover capital Beijing government is now considering has not been tested in any parts of the country.
China IP: Any good advice from Beijing in respect to the business launched nationwide?
Liu Zhengang: I think the matter has been a common concern across the country. But whether or not any region should launch such a business or in what way shall be based on actual conditions of the region. My experience is that I shall inform brothers of the industry or other IP departments of the fact that any concern for this matter does not mean any immediate launch since the maturity levels differ from region to region. Therefore, sometimes we should be good at waiting. Waiting means that when a certain region has relatively mature market elements and can put them together for timely operations, then we should make promotions. One of the market elements is that there are small and medium-sized enterprises in the region, and that some enterprises have quite a number of IP and intangible assets, which is the basis of pledge loans. In the meanwhile, banks should try their uttermost to be familiar with the status of IP and find their characteristics. Then appraisal institutions shall make accurate appraisals to control operations of the loan process.
China IP: Now we are talking about college students starting a business. If a college student has a good patented technology and establishes a company to start a business, is it possible for him to apply for pledge financing?
Liu Zhengang: Theoretically yes, but actually it is unnecessary. In fact, if a business relies on a technical solution, it would be better to find venture capitals or other means of financing. Banks are very cautions in their investment; therefore, it is difficult to persuade banks with only a patent and passion.
China IP: You seem to have taken a very calm stance towards IP pledge financing. Then what do you think of the current intangible assets pledge financing?
Liu Zhengang: The current intangible assets pledge financing has provided another channel for the development of small and medium-sized enterprises. However, it remains a sea spray, far away from large in scale.
China IP: Now a lot of news reported that some region has got certain amount of loans. And we find that Beijing has taken the lead in the country with 600 million in loans but has kept a very low profile. What do you think of the figures of pledge financing?
Liu Zhengang: Certainly, as far as our promotional work is concerned, I think the current figures are too low in terms of needs and potentials from the society. From the current perspective, the higher, the better. However, I do not quite understand banking business. Banks have a control on intangible assets and may have reasonable judgments balanced against tangible assets. In Beijing, at least for the past three to five years, the loans will hit more than 1 billion a year, and climb to 2 to 3 billion five years later. 3 to 4 billion can not be deemed either as much or too little. More than 1 billion to 2-3 billion over the past 3 to 4 years cannot be deemed to be too little. Maturity of some matter, just like a baby who, as he grows up, begins to have milk or breast milk, and then begins to eat food, is a gradual process. We also hope that IP lending is also a gradual process, and we do not want to have too many all of a sudden. Otherwise, big risks will arise. If we carve for excessive happiness and success, more hidden dangers may ensue.
China IP: Currently Beijing has launched IP pledge financing for two years. What are the difficulties in the process?
Liu Zhengang: The main difficulties lie in acceptance of the society. Some might consider IP pledge financing too ideal, particularly some non-service inventors always think that their patents are very precious, and therefore, banks should grant loans to them. But it is not the case in reality. On the one hand, those who need loans demand too much and cannot get satisfaction from the society, which is also likely to lead to new instability. On the other hand, we need to persuade the relevant authorities to push forward this work with caution. The third is that we shall also need to persuade banks, financial institutions and enterprises with practical experience to take bolder steps. Therefore, our work is just like adjusting a puppet, pulling strings to make adjustments in the event of imbalances.
China IP: What are new initiatives or measures in the future?
Liu Zhengang: The most important is the emergence of above-mentioned IP pledge financing turnover capital. On the other hand, we think that if there is a source of water, we would like to activate inventors, so that their achievements may be integrated into legally acceptable types, varieties and trademarks. Once generated, we would push for use of the inventions. For such purposes, IP-related supplemental provisions to investment projects, namely financial investment projects, will be enacted by Beijing government.
By Zhou Yi, China IP
(Translated by Wang Hongjun)
