China offers unmatched business opportunities for overseas businesses. However, before selling products or promoting services, they must face a critical and growing obstacle: the trademark registration process. Recently, the rejection rate for trademark applications has surged to record highs. By early 2025, China had about 50 million active registered trademarks, with nearly 20,000 new applications submitted daily.
The numbers are telling. In 2024, China National Intellectual Property Administration (CNIPA) examined over 6.6 million applications, but the initial approval rate dropped to just under 54%, meaning nearly half of all applications were rejected. This raises an important question for foreign brands: why has obtaining a trademark in China become so difficult? Is it simply due to a lack of originality, or are there deeper, more influential factors? Understanding this reality is essential for developing a successful market entry plan.
The Scale Challenge: Operating in a Saturated Market
China trademark environment resembles a massive land grab where all prime spots have long been claimed and developed. With over 50 million registered trademarks, the most memorable and favorable combinations of Chinese characters have largely been taken. Unlike English, which uses 26 letters to form countless unique short words, Chinese relies on about 3,500 commonly used characters. The number of meaningful, easy-to-pronounce, and commercially positive two- or three-character combinations is limited. Over decades, these valuable combinations have been registered, making trademark conflicts far more likely. New applicants face tough choices: either create longer, four-character names that are harder for consumers to remember or invent entirely new, abstract terms, which is creatively demanding and costly to market. As one experienced trademark agent put it, it’s like trying to find an empty seat in an oversold stadium—you’re not only struggling to find a spot but also likely stepping on someone else toes.
Additionally, defensive registrations have further reduced available options. Many savvy domestic and international companies register their core brands across all 45 trademark classes, building a protective barrier around their intellectual property. For example, a well-known beverage brand might register its name not only for drinks but also for clothing, toys, restaurants, and retail services. While this strategy prevents brand dilution and unauthorized use, it also limits space for new applicants seeking unique identities.
The Brand Awareness Surge: An Intense Competition
As China market matures, awareness of intellectual property rights has grown. The principle market entry follows trademark registration has become a widely accepted rule among businesses, entrepreneurs, and creators. This has led to a continuous flood of new applications, creating a fierce trademark arms race.
Competition now extends beyond protecting current operations. Companies increasingly file trademarks speculatively and strategically, securing names for future products, services, or ventures that may not launch for years. For instance, a tech firm might register a name for current software and also for future hardware, wearables, and consulting services to secure its entire brand ecosystem. This forward-looking filing adds to daily application volumes, intensifying competition for every viable name. In this crowded and fast-growing environment, trademarks have become scarce resources, and registration has shifted from a selection process to a highly competitive battle.
A Shift in Policy: From Lenient Entry to Strict Management
A major reason for rising rejection rates is a deliberate policy change by CNIPA. To improve the market environment, combat bad-faith registrations, and encourage genuine innovation, authorities have tightened examination standards. The approach has shifted from lenient entry, strict management to strict entry, strict management.
Zero Tolerance for Bad-Faith Registrations: Previously, China experienced a wild west period of trademark squatting, where individuals or shell companies registered thousands of trademarks without intent to use them, hoping to sell them at high prices. That era has ended. Examiners now actively identify and reject malicious applications, including large-scale hoarding unrelated to the applicant business, blatant copies of famous brands, or attempts to register international celebrity names. Such applications face outright rejection and public blacklisting, damaging the applicant reputation.
Stricter Language and Character Rules: To avoid conflicts, some applicants used artistic or incorrect versions of Chinese characters, claiming uniqueness based on design. This loophole is now closed. Examiners evaluate trademarks based on standard character forms. Any creative alterations that change a character fundamental identity are grounds for rejection. The focus is on the word itself, not its decorative style.
Protecting Cultural and Linguistic Integrity: Using puns or homophones based on traditional Chinese idioms was once popular. For example, a laundry service might use a pun on a common phrase. Now, the government takes a stricter stance. Examiners assess whether such wordplay harms the idiom cultural heritage or misleads the public, especially children. Most such applications are rejected for negatively affecting social culture or lacking distinctiveness.
Higher Standards for Distinctiveness: A trademark must clearly identify the source of goods or services and distinguish them from others. Descriptive terms like Delicious for fruit or Fast for delivery lack distinctiveness and are hard to register. The bar is now higher; marks must inherently distinguish the brand, not just describe products in a way competitors need to do.
Broader Definition of Adverse Effect: The scope of what counts as an adverse effect has expanded. It now includes not only political, religious, or ethnic taboos but also vulgar, tacky, or attention-seeking terms, and wording that could harm public order or morality. This covers names exploiting recent tragedies, scandals, or negative news. Examiners act as guardians of public decency, making judgments based on societal ethics.
Moving Forward: Prioritize Strategy Over Speculation
The rising rejection rate signals a maturing market, not a closed one. It reflects strong enthusiasm for brand building in China and the government commitment to fostering real innovation and cleaning up the market. Businesses must abandon speculative shortcuts and invest in genuine creativity, strategic planning, and professional advice to build unique brand identities. In a market where good names are scarce, a strong trademark is essential for competition. There is no shortcut or guaranteed approval. Success requires a threefold approach: first, start planning and applying well before launch; second, work with an experienced trademark agent who acts as a strategic partner and guide, conducting thorough searches and analysis; third, invest in creative brand development to create a truly unique and defensible name. Though the process is tougher than ever, those who approach it strategically, respect the rules, and seek expert help can secure a lasting and valuable brand identity in one of the world most dynamic markets.