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US: Heart of Global Copyright Piracy Problem is in China - 2004-08-12

A senior U.S. commerce official says the center of the global product counterfeiting problem is in China, and Chinese authorities are not doing enough to combat the crime. Copyright piracy in China is believed to be costing international companies as much as $50 billion annually.

William Lash, a U.S. Assistant Secretary of Commerce, warns that millions of people are put in danger by counterfeit products made in China. He says fake drugs, for instance, can kill.

The U.S. government says as much as 50 percent of some of popular medicines sold in China are pirated.

Mr. Lash, who is visiting Beijing, said Thursday that many copyright piracy cases worldwide are traced back to China.

"From Jordan to Germany, Poland to Paraguay, Chinese manufactured pirated goods has caused tremendous economic and, in many cases, safety damages. The heart of the problem is in China," he said.

He urged Beijing to do more to combat piracy. The United States estimates that Chinese counterfeiters cost U.S. companies as much as $24 billion annually. It says Chinese piracy robs international companies of more than $50 billion in sales annually.

In many countries, trade with China is becoming a political issue, since it has become an exporting powerhouse in the past few years. Mr. Lash says some members of the World Trade Organization are reviewing options that may be taken against China for not protecting intellectual property rights. He says the U.S. Congress also may act to push China to uphold international agreements.

China has an obligation as a member of the World Trade Organization to protect international copyrights, licenses and patents. The government has passed laws against piracy and has run occasional publicized crackdowns.

But pirated goods - from movies to clothes to automobile parts are easily found in markets across the country, providing jobs for many people.

Mr. Lash says one problem is that penalties are not stiff enough to deter counterfeiters. He adds that corruption, especially at the local level, also hinders efforts to prosecute offenders.

"There is a systemic failure in China to actually protect and enforce these laws," he said. "Showing concrete results in curbing the manufacturing and reaching the provinces and districts - that's the key."

Mr. Lash is on a four-day visit to China, as a follow up to the June trip of U.S. Commerce Secretary Don Evans.