People shop at a duty free shop in Haikou, capital of south China's Hainan Province, May 2, 2019. (Photo:Xinhua)

South China's Hainan Province set up an international intellectual property (IP) exchange on Saturday, vowing to make its trade volume surpass 1 trillion yuan ($142.94 billion) in the next five years, the Hainan provincial government said on its website. 

The exchange vows to become the largest IP trading center in China and an influential one in the Asian-Pacific region, according to the government's announcement on the website. 

By seizing the opportunity to speed up construction of the pilot free trade zone, Hainan may realize cross-border IP trading in the yuan in its new IP International Exchange of Hainan to push the internationalization of the currency, Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing, told the Global Times on Sunday. 

Chen Yang, head of Hainan's financial supervision and administration bureau, said that by combining the pilot zone's reform on the foreign exchange control system, the exchange should explore cross-border IP trading and facilitate the yuan's broader use in investing and financing, the announcement said. 

The exchange is also expected to adopt innovations such as providing targeted tax breaks and yuan's free exchange services when assigning or utilizing IP, as a measure to motivate the liberalization and facilitation of Hainan's service and trade sectors. 

In addition, the market will become a trial site for IP securitization and introduce blockchain technology to IP-related work, such as registration, trade or liquidation. 

Global IP trade volume surpassed $1.5 trillion in 2018, but it mainly occurred in the US, EU and Japan, according to the Hainan government. 

"It is an opportunity for Hainan to reach its trillion-yuan goal, because there is a demand for IP trading in China as well as supportive national policies and effective laws to protect IP rights," Chen Jihong, a partner of Beijing-based Zhong Lun Law Firm who specializes in IP rights trading, told the Global Times. 

He noted that the establishment of Hainan's IP trade exchange could start a mechanism to list prices in the IP trading market to better utilize the value of IP and move the Chinese market.

In November, China issued stricter guidelines to give equal treatment to all market players and equal protection for both domestic and foreign enterprises' IP rights.

In the first 11 months of 2019, total patent applications reached 1.24 million in China with 417,000 being granted, data from China's National Intellectual Property Administration showed. 

The number of patents owned reached 13.2 per 10,000 people.