On the second floor of the Silk Street Market, Beijing's crowded counterfeit center, Xu Chao peddles knockoff Adidas, Mickey Mouse and Diesel T-shirts. But shoppers won't find fake versions of products bearing the 2008 Beijing Olympic Games logo at his stall or elsewhere at the market, a few steps from the U.S. Embassy.

"The penalties for selling Olympic items are several times higher than for other brands," Xu said. The red logo of a running Olympian is the one brand peddlers of fakes can go to jail for stealing, he said.

China is notorious as a knockoff haven, where poor law enforcement has turned a potentially huge consumer market into a land of 75-cent pirated DVDs and $10 fake Louis Vuitton handbags. Yet even amid growing consumer demand for 2008 Games trinkets, counterfeit Olympics goods are hard to find.

Now, U.S. trade officials, business groups and intellectual property lawyers want to know why the Chinese government can't make other counterfeit goods just as scarce.

The Beijing government provides special protection to 48 frequently copied famous foreign trademarks, including Prada, Chanel and Burberry. But last year, only 10.6 percent of the trademark violation cases China investigated involved foreign trademarks, according to a Chinese government white paper released in April.

China's motivation to protect the red running man is clear: The real thing has massive economic value.

"We have no fixed assets," said Liu Yan, deputy director of legal affairs for the Beijing Organizing Committee for the Olympic Games. "So the Olympic logo is the most valuable thing we own."

Through merchandise, sponsorships and other commercial applications, China's logo is largely paying for the Games. Organizers of the 2004 Olympic Games in Athens raised $796 million from domestic sponsors buying rights to use its logo and an additional $87 million from licensing its logo on products.

"The number of counterfeit Olympic goods has been kept to a very small number," Liu said.

Yet the organizing committee and other government officials scoff at the notion that they are giving domestic brands special treatment. "Chinese and foreign enterprises have been protected equally in China," said Liu. China's State Administration of Industry and Commerce, which is responsible for finding and eliminating counterfeits, said it is doing all it can to protect foreign brands.

"Every time when we get a report, we will definitely punish the violators," an agency spokesman said. "But peddlers at markets such as Silk Alley are playing guerrilla tactics with us. When our officials . . . do inspections there, they will hide the products away, but when we leave, they will sell again."

The government made the logo an official priority in 2002, passing a national law exclusively to defend the intellectual property rights of Olympic symbols. That law technically just collects existing laws in one place, applying them to Olympic logos for all levels of government.

"Regulations tend to be more general, so these [2002] details make it easier to enforce the law for the administrative authorities," Liu said. "But the decree hasn't given us any additional powers."

Silk Street peddler Xu isn't any likelier to go to jail for selling a few fake Olympic items than for selling any other knockoffs, according to the organizing committee; the State Administration of Industry and Commerce wouldn't comment on jail time. Imprisonment is technically possible for some major criminal intellectual property violations in China, but so far, the committee said, it isn't aware of any imprisonments for violations of its brand.

"They are very strict," said Peter So, whose company, Yue Wing Cheong, makes 50 Olympic items.

Olympic merchandise carries sophisticated tags featuring holograms, watermarks, bar codes, serial numbers and other devices. Holographic tags are expensive to make, but pirates have been known to copy them, too. The organizing committee's tags, which are added to items after they have left manufacturers' hands, are done by China's printer of money and stamps. "You can feel the quality of them," Liu said.

Such technology helps government inspectors more than it does consumers, but then, there are only 24 official legitimate places to buy Beijing Olympics items, compared with thousands of outlets for, say, Nike goods.

Beijing also has fiercely nationalistic Chinese pride on its side, because residents might be less inclined to steal something they consider is owned by the whole country.

A law protects the intellectual property rights of the 2008 Beijing Olympic Games logo, made from flowers in a Tiananmen Square rendition.