BEIJING, Sept. 2 -- China continues to top the world in the number of trademarks registered, driven in part by government encouragement to improve innovation and competitiveness.

The number of valid trademarks registered in China totaled 7.61 million by the end of June, data from the State Administration for Industry & Commerce (SAIC) showed on Tuesday.

The SAIC had received over 14 million trademark applications as of June. China has led the world in the number of trademark applications since 2002.

Zhang Mao, director of the SAIC, downplayed the surging number of trademarks, saying only a small proportion of Chinese brands are recognized in the international market

He pointed out that Chinese enterprises still rely too much upon cost advantage. Zhang added that only 20 percent of export-oriented firms have their own brands and just 11 percent of China's exports are sold under domestic brands.

As the "world's factory," China has been eager to improve its innovative abilities and export more products created in the country rather than simply bearing the "made in China" label.

The country's revised Trademark Law went into effect in May to streamline registration procedures and improve protection.

Zhang promised more efforts to safeguard intellectual property, including trademarks, especially well-known brands, which are more vulnerable to "malicious" trademark registration.

He also pledged to increase penalties for trademark infringement, such as demanding more punitive compensation.