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Pirated CDs and DVDs at a Beijing store last April. Trade officials and industry executives have cautioned against too high expectations of Beijing’s latest move to combat counterfeit goods. (JASON LEE/JASON LEE/REUTERS)
Pirated CDs and DVDs at a Beijing store last April. Trade officials and industry executives have cautioned against too high expectations of Beijing’s latest move to combat counterfeit goods. (JASON LEE/JASON LEE/REUTERS)

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China promises crackdown on fake goods Add to ...

China has promised another wave of tough measures against counterfeiters as it defends itself against constant criticism of its record in the protection of intellectual property rights.

The country will launch a crackdown early next year on goods including fake medicines and cigarettes, pirated software and CDs, said Jiang Zengwei, deputy minister of commerce.

The initiative was announced just hours after the office of the U.S. Trade Representative (USTR) blasted China again over a string of market access hurdles including intellectual property rights protection.

It is the first policy announcement since Beijing set up a permanent mechanism to deal with IPR issues last month, including a “leadership group”, which is effectively a collection of politicians operating outside the cabinet with responsibility for dealing with infringements.

Although the U.S. has long called upon China to better institutionalize its law enforcement against piracy and make a long-running anti-piracy campaign permanent, trade officials and industry executives have cautioned against too high expectations of Beijing’s move.

The last time China set up a permanent mechanism to deal with IPR infringements was in 2003, when a national office was created. However, the group was later disbanded and the government returned to its campaign-style enforcement.

The Business Software Alliance, the world’s leading software industry body, warned two months ago that revenues lost to software piracy in China were likely to jump because Beijing’s high-profile anti-piracy campaigns had failed to deliver.

78 per cent of all software sold in China in 2010 was pirated, according to the BSA, compared with a global average piracy rate of 42 per cent.

Mr. Jiang, who heads the new office, admitted that he is facing a huge task. “It will be hard to root out infringement and counterfeiting in the short term,” he said, adding that China faced a “crisis of creditworthiness”.

But the deputy minister said the government would try to address the problem with a mixture of short- and long-term measures. The special campaigns will include a crackdown on the sale of fake goods online and inspections of software pre-installations on computers sold in China.

In addition, Beijing intends to blacklist companies with a record of intellectual property rights infringement or counterfeiting and handing the data over to banks. In theory, the measure could bar IPR violators from new funding, however since many infringers are small firms who have no access to state bank credit anyway, the move’s impact is likely to be limited.

Legal experts often argue that China could see much faster progress in combating IPR infringements if it strengthened its legal system instead of overly relying on administrative campaigns.

Mr. Jiang said it was Beijing’s long-term goal to “harmonise” its IPR protection structures with the international practice of focusing on protection through the courts, but relying on criminal prosecution of infringers only would prove too slow and ineffective at the current time.

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