Piracy progress in China. Really.

Posted by: Bruce Einhorn on March 29, 2006

Convinced that rampant counterfeiting of goods in China is undercutting American companies? No need to worry, the Chinese government is on your side. With U.S. Commerce Secretary Carlos Gutierrez visiting Beijing and talking with Chinese leaders about the need for more intellectual property rights protection, officials are anxious to show the Americans that China is taking the problem seriously- and that the Chinese are victimized by the pirates too. Xinhua today reports Zhang Qin, the vice commissioner of China’s State Intellectual Property Office, saying at a Sino-U.S. trade meeting that “piracy strikes the heaviest blows on Chinese companies and consumers” since the counterfeiters usually go after Chinese goods. Xinhua also quotes Vice Premier Wu Yi, explaining why China is cracking down on the counterfeiters: “Independent innovation is the soul of the development of science and technology and the inexhaustible power for the development of a nation. No IPR protection, no independent innovation.”

Stirring words, no doubt. And when it comes to IPR, government officials certainly are good at staying on message. But it would be wrong to dismiss comments like these as simple spin ahead of next months’ summit between George W. Bush and Hu Jintao. For years, U.S. executives have been saying that they only when the Chinese believe that it is in their own interest to crack down on piracy will there be serious progress against counterfeiters. Now, with innovation the buzzword among Party-folk in Beijing and the Chinese government talking about boosting spending on science and technology by 20%, China’s leaders do seem to have concluded that they’ll have a hard time nurturing a high-tech economy unless they do something about all the knock-off DVDs and PC software.

And, hard as it might be for China skeptics to believe, the country is actually making progress. Robert Holleyman, president of the Business Software Alliance, told Reuters that there is reason for optimism. According to the Reuters story, Holleyman expects that the piracy rate for 2005 to be lower than the 90% figure for 2004. Not great, but in the early ’00s the figure was well above 90%, so the movement is in the right direction.

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