Taking a Harder Line on Piracy

But trade analysts were less sanguine. Reaction from China, where officials yesterday offered no response to the new WTO action, has so far been muted. But Song Hong, head of international trade research at the Chinese Academy of Social Sciences in Beijing, said he worries that a few more jabs from Washington could trigger angry retaliation.

That, he said, "would be a terrible thing. It would not be good for China, not good for the U.S.A., not good for the world economy."

Song noted that the Chinese government has taken several steps to protect intellectual property rights. This month, China's Supreme People's Court introduced harsher penalties for vendors selling pirated DVDs. The new law lowers the threshold for criminal prosecution from 1,000 pirated items to 500. Individuals who make more than 2,500 pirated copies of music, software or movies could face up to seven years in jail.

"I really don't know what more the Chinese government can do," Song said.

Despite repeated crackdowns, pirated movies, music and software are sold openly and widely in China. Leonardo DiCaprio and Matt Damon's "The Departed" goes for about $1, while the Microsoft Office suite can be had for as little as $3. Some items are sold on major streets in ordinary-looking shops bearing big signs that say "DVD," operations so slick they offer receipts. Smaller vendors hawk DVDs out of suitcases or boxes near subway stations and public bathrooms.

The Chinese government has run periodic campaigns to try to halt the trade, which has been going on for decades.

Over the weekend, one of Shanghai's largest vendors of pirated U.S. DVDs cleared out its downtown store and reopened in another neighborhood, advertising legitimate Chinese movies and music.

Through a red door in the back, however, a different set of goods was still available: thousands of pirated American titles.

Ariana Eunjung Cha reported from Shanghai.