China to toughen stance on software piracy

The Chinese government has committed to more intellectual property protections, following trade talks with the U.S.

Chinese government officials have committed to increased protections for intellectual property such as software, saying they will step up criminal enforcement for software and entertainment piracy after talks with US trade officials.

China will conduct seven special enforcement operations against intellectual property (IP) pirates during 2006. It would also open infringement reporting centres in 50 cities, Chinese vice-premier, Wu Yi, said during a press conference in Washington, DC.

China would also accelerate the transfer of piracy cases from administrative to criminal enforcement bodies, she said. That announcement seemed to address US software vendor complaints that China does not adequately enforcement IP laws.

US officials praised the progress on trade issues during the day-long talks, saying the IP and other agreements moved toward addressing a trade imbalance between the two countries. In 2005, the US imported about $US202 billion more in Chinese goods than China imported from the US, according to US figures.

"We have made progress," US secretary of commerce, Carlos Gutierrez, said. "There is still work to do."

During a presentation about the results of the talks, Wu emphasised a Chinese government ruling requiring all computers sold in the country to include a preloaded, licensed operating system.

"This is an important measure taken by the Chinese side to address this issue at the very root," she said.

Asked if the Chinese commitments on IP protection were modest, Gutierrez said the two countries had made important progress.

"As with everything else, numbers will ultimately tell the story," he said.

China also promised to crack down on consumer markets selling pirated software, CDs and DVDs, and promised to vigorously pursue individual IP cases, according to a press release from the Office of the US Trade Representative.

A trade group based in Washington, DC, the Business Software Alliance (BSA), praised the move by the Chinese government to mandate preloaded software. But the mandate won't fix a major problem at Chinese businesses, where the vast majority of software remained unlicensed, BSA's president and CEO, Robert Holleyman, said.

"That is only part of the bigger challenge," he said of the Chinese preloading mandate. "That doesn't necessarily mean [businesses] are going to add PCs with legal applications."

An estimated 90 per cent of software used in China was unlicensed in 2004, according to IDC.

In November, Microsoft signed a deal with Lenovo for the top computer seller in China to use only licensed versions of the Windows operating system. Microsoft announced similar deals with two more Chinese PC vendors this month.

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