Mon, Nov 05, 2001 - Page 17 News List

WTO must face piracy by Chinese

KNOCK-OFFS Pundits say that without improved efforts by the government, intellectual property rights will remain a pipe dream


Turn on any computer in China, whether you are in a government office, a business or someone's home, and you can be more than 90 percent certain the software it runs on is bootlegged.

Piracy is endemic in China: a multi-billion dollar industry which provides the bread and butter for whole towns, generates millions of jobs and is woven into the fabric of society from the itinerant compact disc peddlers to officials who turn a blind eye at the highest levels of government.

And as China prepares to complete the final leg of its bid for membership of the WTO -- with its attendant rules on protecting intellectual property -- the counterfeiters' muscle is growing.

According to a recent report by the Business Software Alliance, which gathers top software makers and researchers, the losses last year in China due to software piracy stood at US$1.12 billion, a vast increase on the US$645 million of 1999.

Software is just one small part of the puzzle. Knock-off films and video games, luxury goods, cosmetics, cigarettes, alcohol, even shampoo sachets and vehicle brake pads are big business in China.

"A government study done early last year indicates that local and foreign brands suffered pretty similar problems and I believe that around 15 to 20 percent of most consumer goods in China are counterfeit," said lawyer Joe Simone, vice-chairman of the Quality Brand Protection Committee under the China Association of Foreign Investment Enterprises.

The association is a coalition of 77 multinationals with combined profits of over US$10 billion that make goods in China ranging from agricultural chemicals and food to drugs and lipsticks.

Foreign multinationals are pressuring the Chinese government to treat the problem more seriously.

Many are threatening to withhold further investment unless matters improve, while also hoping WTO membership will be the catalyst for tougher application of anti-piracy laws.

Recent enforcement drives, however, reflect just how pervasive the problem is, such as a campaign to promote the use of copyright software in one sector -- government departments.

When not even the government uses licensed software, cracking down on the pirates -- and more importantly for China, creating an environment where homegrown software firms might prosper -- is a Herculean task.

"China's entry into the WTO will not make much difference to the counterfeiting problem because it's deeply rooted in the Chinese culture and so many people depend on it for their jobs," said Peter Humphrey, who heads a white-collar crime unit at accountants PriceWaterhouse Coopers.

Furthermore, Humphrey notes, any crackdown on counterfeiting will never work without a more positive attitude from the police and the courts.

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