BEIJING, March 27 (UPI) -- China and the United States are laying the groundwork to deal with the thorny issue of intellectual property rights ahead of Chinese President Hu Jintao's trip to Washington.
Piracy and other forms of property infringement cost American software, movie and music firms an estimated $2.4 billion in lost sales in 2005. China's trade surplus with the U.S. topped $202 billion last year, spurring lawmakers on Capitol Hill to draft legislation to prod the Beijing to level the playing field.
In preparation for high level Chinese delegation visits to the United States in April, Secretary of Commerce Carlos Gutierrez said on Monday that China needed to stamp out intellectual property violations which harmed Chinese and American firms.
"Without effective intellectual property protection, China's intellectual property and inventions would be the target of illicit enterprises," he said during a stop in the southwestern city of Chongqing.
Gutierrez said widespread counterfeiting posed a threat to China's own long-term development, citing the example of lost tax revenues.
"Ironically, it is China that is most affected by violations of intellectual property rights," the Commerce Secretary noted. He said the failure to curb piracy could thwart China's efforts to create firms able to compete globally.
On April 11 Gutierrez, U.S. Trade Representative Rob Portman and Chinese Vice Premier Wu Yi are scheduled to meet for discussions about IPR and currency revaluation issues in preparation for President Jintao's April 20 visit to the White House.
The Chinese cabinet's information office also held a press conference Monday in Beijing to explain recent efforts in the fight against IPR violations. Representatives from the Supreme People's Procurate, Ministry of Public Security, Customs Administration, State Administration for Industry and Commerce and the National Copyright Administration were in attendance.
The Chinese government had a three-pronged goal for the briefing: to describe the coordination efforts between the various departments in tackling trademark infringement crimes; promote the speed in which IPR cases are referred to administrative law enforcement authorities; and introduce new regulations that accelerate the pace of IPR violations going to judicial law authorities.
Analysts believe devoting adequate training and manpower to enforcing IPR laws on the books is one of the biggest challenges the PRC faces to improve its record in this area. At this point, the problem remains bigger than the country's efforts to date.
State-run Chinese media reported that police arrested 2,119 suspects for intellectual property violations in 2005, an increase of 56 percent from the previous year.
Zheng Shaodong, assistant minister of the Ministry of Public Security, said the value of IPR cases exceeded 1.28 billion Yuan (over $160 million) in 2005, a 366 percent jump year on year.
Yan Xiaohong, deputy chief of the National Copyright Administration, admitted his country "still has a serious problem of piracy," adding, "we need to study more forceful and effective measures to curb it."
Yan also refuted claims made by outside industry groups that 90 percent of the software used in China was pirated, saying software designed for large organizations or enterprises accounting for two-thirds of all programs sold "almost have no possibility of piracy."
"We can see this (90 percent) is not true in reality since the individual software only account for one-third of China's software industry," Yan claimed.
Gong Zheng, deputy director of China's General Administration of Customs, said his department had solved 1,210 piracy cases, involving $12.3 million dollars in 2005. The official said 91.4 percent of the cases were related to trademark piracy of clothing, shoes, hats, toys and plastic goods.
Gong said customs had also confiscated 210 million pirated discs shipped in from foreign countries since 1999.
