China gets mixed reviews on policing piracy

SHANGHAI — China on Monday touted the impact of a recent crackdown against pirated goods, seeking to mollify criticism from the United States that it has done little to curb brazen and widespread sales of everything from illegally copied Hollywood films to fake auto parts and pharmaceuticals.

At a press conference in Beijing, Zhang Zhigang, a vice minister of commerce, said China has seized 2 million compact discs during the first half of the year in raids on 8,000 CD and software dealers around the country, fining violators some $3.6 million.

Meanwhile, in a scene viewed daily in every Chinese city, sidewalk merchants at one of Shanghai’s most prominent intersections openly hawked CDs from artists such as Norah Jones and Bob Dylan for less than $1. A block away, a music and movie shop overflowed with an eclectic collection of pirated goods, from “Superman II”, “Annie Hall” and “Winnie the Pooh” DVDs to Britney Spears CDs.

The disconnect between the official word from the capital and the actuality of the street highlights the entrenched nature of one of the most nettlesome trade conflicts between Washington and Beijing. Though China is in the midst of one of a series of periodic crackdowns, experts said the continued blatant sales illustrate that the government is more interested in managing the politics of the problem than curbing the reality.

Ultimately, the authorities may be overmatched: In this still nominally Communist country of 1.3 billion people, the concept of private property is neither fully understood nor valued, let alone the abstract notion of intellectual property. Penalties for violations are weak and enforcement spotty, say experts. Local authorities often shield factories from raids, opting to protect jobs over the nebulous notion of trademark infringement.

“It’s difficult for the central government to impose its will on every street corner,” said William Fisher, a lawyer with the Shanghai office of Lovells, an international firm that represents entertainment and video game companies in patent and piracy disputes. “I’ve seen these announcements time and time again. It appeases the situation, then the problem emerges again.”

Still, some change was clearly evident in Shanghai on Monday. Vendors said police have in recent weeks forced them to move street-side stalls into alleyways. One vendor on Shanxi Road who as recently as last week had her discs spread out for inspection was instead approaching passersby with her wares cloaked inside a leather handbag — a fake Luis Vuitton model.

In recent months, the Bush administration, facing pressure to address the United States’ $124 billion trade deficit with China, has accused Beijing of unfair business practices. Washington has claimed that China maintains its currency at an artificially low value to make its exports cheaper while subsidizing major industries. Intellectual property rip-off has been a particularly frequent talking point. In visits here, Commerce Secretary Donald Evans has upbraided Chinese officials for failing to crack down on the trade.

Chinese officials have held their ground on the currency issue while dismissing claims that their country’s growing stature in manufacturing has been gained unfairly. But intellectual property has been the lone area in which Beijing has consistently promised to do more.