SZ to pilot creation of IP financial ecosystem

Shenzhen will pilot the creation of an intellectual property (IP) financial ecosystem, according to the National Intellectual Property Administration, the country’s financial regulator recently.

The initiative aims to resolve long-standing challenges such as IP pledge registration, valuation, and disposal, transforming IP into assets for enterprises seeking financial services and accelerating the translation of IP into real-world productive forces.

IP financing is an innovative strategy that allows companies to use their IP assets — patents, trademarks, and copyrights — as collateral to secure loans and generate revenue. This move comes as global markets increasingly recognize the dominance of IP. This asset class accounts for up to 90% of a company’s value in major indices like the S&P 500, as per the World Intellectual Property Organization, the U.N.’s IP watchdog.

In 2024, Shenzhen’s patent and trademark pledge financing surpassed 51 billion yuan (US$7 billion), benefiting 1,427 firms, according to the local financial management authority. With more than 25,000 high-tech firms, the city has topped the country in international patent applications under the Patent Cooperation Treaty (PCT) for 21 consecutive years.