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Pirated Goods Swamp China

Official Crackdown Has Little Effect

By Peter S. Goodman
Washington Post Foreign Service
Tuesday, September 7, 2004; Page E01

SHANGHAI, Sept. 6 -- China on Monday touted the impact of a recent crackdown on pirated goods, seeking to mollify criticism from the United States that it has done little to curb the brazen and widespread sale of such things as illegally copied Hollywood films, fake auto parts and pharmaceuticals.

At a news conference in Beijing, Zhang Zhigang, a vice minister of commerce, said China 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 about $3.6 million.

Despite crackdowns, music and movie piracy is still rampant in China. Sidewalk merchants sell CDs for less than $1. (Greg Baker -- AP)

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Meanwhile, in a scene familiar 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, including Spider-Man 2, Annie Hall and Winnie the Pooh DVDs and 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.

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 is spotty, experts said. Authorities often shield factories from raids, choosing to protect jobs over trademarks.

"It's difficult for the central government to impose its will on every street corner," said William D. 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 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 Louis Vuitton model.

Even as China's government sought to soothe critics Monday, officials heaped doubt on two prominent complaints from American companies General Motors and Pfizer.

General Motors has accused a Chinese firm, Chery Automobile Co., of copying one of its models, the Chevrolet Spark. Vice Minister Zhang said General Motors had failed to gain trademark protection for the car in China, adding that the case is still being reviewed.

General Motors said it remains confident that its position will be vindicated in ongoing discussions with China's Ministry of Commerce.

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