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US Official: China Lax on Property Rights Protection - 2002-01-23

A U.S. trade official is calling on China to step up its protection of intellectual property rights. China's recent entry to the World Trade Organization has had virtually no effect on counterfeiting and piracy in the country.

Assistant U.S. Trade Representative Joseph Papovich says China must do more to crack down on counterfeit and pirated goods. Speaking to reporters in Beijing after his meetings with Chinese officials, Mr. Papovich said China has made some changes to its intellectual property rights laws in accordance with WTO rules, but says enforcement is the big challenge. "The problem is still very great. Most companies tell me that the counterfeiting problems and the piracy problems that they face here are probably more than anywhere else in the world," says Mr. Papovich. "Part of that is a reflection of the fact that China is so big compared to other countries in the world. But because of that, the problem is very severe."

Mr. Papovich says some 95 percent of software sold in China is pirated, and there continues to be high levels of piracy in music and movies. He says there is also widespread counterfeiting of consumer products such as detergents, cosmetics, and batteries. He adds that unless the government increases the penalties for those who violate intellectual property rights, some foreign companies may decide they can no longer afford to do business in China. "I have had companies recently tell me that they are increasingly frustrated with the continued high levels of piracy and counterfeiting in China," he says. "They can absorb such counterfeiting and piracy for a certain period of time. It's a business decision for them as to whether they will make the definitive decision to leave."

Mr. Papovich says Washington will continue to consult with Beijing on how it implements its WTO commitments to protect intellectual property rights and work with local officials on enforcement. He says the Chinese government is aware of the extent of the problems and so for the time being Washington has no intention of taking individual cases of piracy or counterfeiting to WTO arbitrators.

According to WTO rules, if one member does not honor its obligations, other countries have the right to take a trade grievance to the WTO dispute settlement body.

China joined the World Trade Organization in December. Last July, it implemented a revised patent law, and in October, it adopted a new trademark law.