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Wed, May 17, 2006 - Page 10 News List

US report decries China's lax crackdown on piracy

MOUNTING DAMAGE The US Chamber of Commerce called on Beijing to increase criminal penalties and enforcement efforts as product piracy continued to rise


China is still doing too little to fight growing product piracy despite repeated crackdowns, causing mounting damage to legitimate producers of movies, music and other goods, a US business group said yesterday.

"The problem is growing faster than the enforcement efforts," said Charles Martin, president of the American Chamber of Commerce in China.

The group, in an annual report on business conditions, called on Beijing to increase criminal penalties and enforcement efforts for piracy that trade groups say costs legitimate producers billions of dollars a year in lost potential sales.

The report, based on a survey of more than 200 US companies in China, listed other obstacles to foreign businesses including bureaucracy and unclear regulations.

But Martin said Beijing has made steady progress in those areas -- much of it mandated by its WTO commitments -- while product piracy is getting worse.

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China is widely regarded as the world's top source of illegal copies of products ranging from pop music and Hollywood movies to designer clothes and even heart medicines.

Pirated goods are still widely available in China despite repeated government crackdowns.

The Chamber of Commerce said 41 percent of companies in its survey reported seeing more counterfeiting of their products, while 49 percent were dissatisfied with Chinese enforcement.

Also yesterday, the state-run China Daily newspaper reported that 13 people were sentenced to up to seven years in prison for pirating liquor, auto parts, DVDs and other goods.

The newspaper said the judgments, handed down Monday in Beijing and three other cities, were a sign of harsher punishments following a move to lower the threshold for criminal prosecution in late 2004.

Visa problems

The Chamber of Commerce report also cited tighter US scrutiny of visa applicants as a business obstacle, saying firms reported losing sales because Chinese customers couldn't get visas.

It said 44 percent of companies surveyed said they lost "significant business" while nearly 70 percent have stopped arranging meetings in the US due to worries about potential visa obstacles.

It was the first time the chamber reported on visa policy, though companies have complained regularly about the tighter scrutiny imposed after the Sept. 11, 2001, terror attacks.

The huge volume of US-Chinese trade means the rules hit businesses harder in China even though they might be applied the same way in other countries, said Donald Forest, executive director of the financial firm Sierra Asia Partners, who helped to oversee the survey.

"Relative to competing nations, visa policy remains a significant deterrent to buying American goods," he said.

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