China urged to intensify piracy crackdown

BEIJING, China -- China is making little progress in ending piracy of music, movies, software and consumer goods, a U.S. trade official has said.

China has a rampant counterfeit industry and has a long way to go to fulfil its promises as a new World Trade Organization member, Assistant U.S. Trade Representative Joseph Papovich said in Beijing on Wednesday.

Industry groups have estimated that more than 90 percent of computer software in China is pirated.

Vendors openly hawk pirated DVDs for as little as $1.00, while street markets sell fake name brands including Nike shoes and several other sports brands.

China has repeatedly promised to shut down its huge counterfeiting industry, especially in the run up to becoming a WTO member in December.

But while Beijing has enacted laws and trained enforcement officials, the penalties and fines are too low, Papovich said.

Referring to his last visit to China in November 2000, Papovich said at a news conference, "Companies tell me the problem is still as severe as it was then."

Avanlanche

CNN.com Asia

More news from our
Asia edition

Business groups have said China is likely to face an avalanche of complaints in WTO dispute forums about lack of protection for patents, copyrights and other intellectual property.

Papovich said that the United States hasn't threatened to file such a complaint.

The International Intellectual Property Alliance, a trade group, estimates that China's piracy of entertainment and computer goods cost businesses $979 million in lost sales in 2000.

Besides pirated computer software, music CDs and movie VCDs and DVDs, counterfeit consumer goods ranging from band-aids and cosmetics to razor blades and shampoo are widely sold.

Most pirated music, movies and software goods are made overseas and smuggled into China, while fake consumer goods are produced domestically and, in some cases, exported.

'Slap on the wrist'

Papovich said administrative sanctions the government uses to punish violators are little more than "a slap on the wrist."

"We believe that more of these counterfeiting cases, of product counterfeiting and copyright piracy, need to be referred for criminal prosecutions," he said.

Although WTO members can resort to sanctions over lack of enforcement, the United States wants to help China tackle the problem by sharing information and making suggestions.

But foreign firms could pull out of China or hesitate to enter the market if high levels of piracy continued, he said.

Piracy is one factor hampering China's development of its domestic software industry, which lags much of Asia.

"I think the Chinese government recognizes that its ability to develop its own indigenous industries is adversely affected by high counterfeiting and piracy rates," Papovich said.