China takes harder line on pirated U.S. goods
By Calum Macleod
USA Today
BEIJING — China has been stepping up efforts to curtail the pirating of U.S. software and DVDs, an issue that has long strained its trade relations with the United States.
Chinese President Hu Jintao brought that message to his meeting with President Bush in Washington last week. Counterfeiting of U.S. software, entertainment and other products is a major trouble spot for relations and was a key issue for talks during Hu's four-day U.S. visit.
U.S. Customs figures show China made 63 percent of all pirated goods seized at America's borders in 2004, worth $87 million. Far greater losses are routine for U.S. firms fighting to enter China's booming market.
Typical of millions of such stores across China is the Zero Hour audio-visual shop in Beijing. Here shoppers with $1.60 to spare can pick up a "Brokeback Mountain" DVD or another Oscar-winning movie. Why so cheap? Because Hollywood gets zero profits on the sale.
China is "doing a lot to stop counterfeiting," says Huo Wenhui, a guide at an exhibition on intellectual property protection at the Military Museum of the Chinese People's Revolution.
Foreign companies have been hurting for years. The exhibition showcases fake products seized in Chinese markets that range from Johnson's baby lotion and Pfizer's Viagra to Taylor-made golf clubs and Adidas sneakers.
Such rampant counterfeiting is "an inevitable step in China's development," says Chuck Qi, senior brand protection manager at the Chinese subsidiary of the sportswear giant. More than a million items of fake Adidas products are seized every year in China.
But while counterfeit cases increase, the average volume is shrinking, says Qi, thanks to China's recent crackdown.
"Criminal prosecution is the most effective way to deal with (intellectual property) problems," Qi says, as the counterfeiters fear exceeding a numerical threshold that could land them in prison — instead of subjecting them to an administrative measure such as a fine. "It shows that Chinese law enforcement is improving."
Criminalizing counterfeiting is an example of a stepped-up effort by Chinese authorities to deal with it. Other methods include:
