James Kynge

You can't get the information that you need.

When I was a journalist at the FT, we used to try and do this a lot.

I don't know how these guys did it, but they managed it.

And they found, for instance, that about 800 billion US dollars in Chinese ownership of companies abroad is held by Cayman Islands subsidiaries of those Chinese companies.

So this is a massive kind of backdoor, I suppose, to acquisitions all over the world.

And then the revelation is, after that,

that these Chinese companies, these Cayman Island companies, have been buying primarily tech companies, and they've been buying them apparently because of the pre-patent intellectual property that these companies held.

So...

They're doing that because then they get hold of the intellectual property.

And as you said, Alice, that allows them to climb the technology ladder and to take China with them.

So what this paper to me has discovered is this extraordinarily vibrant route through the tax havens to the budding tech...

tech companies in the US and Europe and elsewhere that have helped China ascend the technology ladder to a degree that, well, certainly I had no idea about before.

So I think it's a really big contribution to our understanding of how the world works.

Then the last finding is that once

These companies in the US and Europe have been bought by a Chinese company held in the Cayman Islands or in one of the other tax havens.

The intellectual property is then taken back to the Chinese company and then registered as a patent.

And that's one of the reasons why we see China owning so many of the patents in the world these days.

At the moment, the applications by Chinese companies for patents at the World Intellectual Property Organization at the United Nations is far greater than any other country.

From memory, I think it's about 1.8 million patents pending, applications pending, and that compares to about 500,000 for the US.

I think this paper has discovered a crucial kind of backdoor that China used to vault itself higher up the technological ladder.