China doesn't send enough IPR pirates to jail, says the US

China has to give out more prison sentences and heavy fines to deter copyright cheats and meet its WTO obligations, US Assistant Secretary of Commerce William Lash said yesterday.

Fake products made in China ranging from car parts and playing cards to pharmaceuticals and pirated digital video disks are costing American companies US$20 billion to US$25 billion each year, Lash said.

"When you have a level of piracy in China ... obviously there is not much being done to deter piracy," Lash said at a news conference following meetings with Chinese trade officials and prosecutors.

China needs to increase criminal prosecutions by lowering the threshold at which intellectual property crime is considered merely an administrative matter, he said.

Chinese officials said such a move was being considered, but haven't provided much information about actual sentencing of violators.

"Laws on the books are important but, unless people are actually going to prison or facing serious fines, which we're not really seeing, it's hard to assume that there has been true deterrence," Lash said.

"It's important that we see true action and real deterrence take place."

US exports to China are growing as tariffs fall according to promises that China made when it joined the WTO in 2001, Lash said.

But Lash said he was concerned about China's ability to meet other commitments on liberalizing trading and distribution rights and improving government transparency and decision making.

He said he also discussed loosening the trading band on the Chinese currency, the yuan. US officials have pushed for the move to allow the yuan to strengthen and make Chinese exports less competitive, but China has made no concrete promises to do so.

US politicians have called on more pressure on China to free the yuan, which has been set at a rate of about 8.3 to the US dollar since 1994.

Lash's boss, Commerce Secretary Donald Evans, is expected to bring up the issue when he visits Beijing next month.