China filed for more patents than any other country in 2011, surpassing the US and Japan as seeks to increase innovation and improve its record on intellectual property rights, Reuters reported. A report published by Thomson Reuters said applications to China's patent office have risen an average of 16.7% annually since 2006, to nearly 314,000 in 2010. The Chinese telecommunications maker ZTE (000063.SHA, 0763.HKG) was the second-largest global patent filer, behind Japan's Panasonic (PC.NYSE, 6752.TYO). According to the report, patent applications from China should total nearly 500,000 in 2015, compared with 400,000 from the US and 300,000 from Japan. However, legal experts have pointed out that China provides generous subsidies for filing patents, regardless of whether it is eventually granted, distorting incentives to apply. "One thing is volume, quality is quite another. The return, or the percentage of grants, of the patents is still not as high in China as, say, in the US, Japan or some places in Europe," said Elliot Papageorgiou, a partner and executive at law firm Rouse Legal.