How strong would IP impact the domestic industries in better-off developing countries? Here's a good example: China's pharmaceutical industry faces a major structural shake-up after the State Drug Administration (SDA) adopted strong IP rules over the last two months.

The new rules, providing better IP protection for domestic and foreign drug makers, would stimulate the consolidation of the industry. Major mergers and acquisitions should be anticipated in the near future.

The new rules also mean that local drugs makers, which used to model their products on medicines manufactured overseas, would have to change their business strategy. These companies may now choose to focus on drug distribution and marketing.

And in the new IP-friendly environment, those financially competitive pharmaceutical companies would spend more resources on the research and development of new drugs... which is a good thing.

But for those small companies that neither have expertise to create new drugs nor financial ability to promote drug sales, life is going to be very hard....