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China Official: IPR Crimes Shifting to West and Central Regions, Exurbs, Internet

Thursday, January 23, 2014
By Leslie A. Pappas

Jan. 21 --China will step up its fight against intellectual property infringement in the country's western and central regions, city outskirts and on the Internet to combat the increasing trade of counterfeit products in those areas, a Chinese government official said Jan. 21.

A recent analysis of China's counterfeiting trends revealed emerging problems in the three areas, which authorities have dubbed the “three shifts,” Chai Haitao, deputy director general of the Office of the National Leading Group for Combatting IPR Infringement and Counterfeiting, said at a press briefing in Beijing.

Past counterfeiting activities were concentrated in the Yangtze River and Pearl River deltas, but as enforcement campaigns have curtailed problems in those areas, counterfeiting has started to move to the developing western and central regions, Chai said.

Sales of counterfeit products are also moving out of city centers and are becoming more common at the city edges, Chai said. Counterfeiters are also increasingly exploiting the Internet, which has opened new opportunities for criminals and is more difficult to control, Chai said.

Authorities will shift their focus to the three areas in the coming year, and will increase inter-departmental cooperation and information sharing to improve enforcement, Chai said. The government will also promote changes in some laws and regulations to make it easier for the administrative enforcement and criminal justice systems to work together, Chai said. 

Diseased Pork Sold as Lamb

Authorities arrested 59,000 criminal suspects and seized more than 9,000 tons of fake and shoddy products in 2013, solving 55,000 cases worth 172.9 billion Chinese yuan ($28.58 billion), Gao Feng, political commissar of the Economic Crime Investigation Department of the Ministry of Public Security, said at the same press briefing on Jan. 21.

Products seized included injection fluids made of tap water, antibiotics made from starch, cooking oil collected from kitchen waste, diseased pork processed and sold as lamb slices and “sanitary napkins” contaminated with bacteria, according to the Ministry.

One of the largest single operations, called Battle Cloud Top, broke up an online sales network selling fake drugs, seizing 300 million phony pills worth 2.2 billion yuan ($330 million).

Gao reported increasing cooperation between Chinese ministries and departments in IPR enforcement. Since 2008, there has been a 71 percent increase annually on average in the number of cases reported to public security organizations by administrative agencies, Gao said. 

IPR Enforcement a 'Significant Challenge’

Enforcement of China's intellectual property rights laws and regulations “remains a significant challenge,” according to the Office of the U.S. Trade Representative's 2013 Report to Congress on China's WTO Compliance, released in December. Counterfeiting and piracy remain “at unacceptably high levels and continue to cause serious harm to U.S. businesses across many sectors of the economy,” the report says.

A study released in 2011 estimated that U.S. businesses suffered a total of $48 billion in lost sales, royalties and license fees due to IPR infringement in China in 2009, more than two-thirds the value of U.S. goods exported to China that same year, according to the report.

“The reported experiences of U.S. businesses on many fronts suggest that losses continue on a grand scale,” the USTR's office said. 

EU-China IPR Cooperative Effort

In related news, China's Ministry of Commerce and the Delegation of the European Union on Jan. 16 launched a new EU-China intellectual property rights cooperation project, according to the China Daily, the country's official English-language newspaper.

Also, China saw 1.9 million newly filed trademark applications in 2013, up 14.15 percent year-on-year, according to statistics published by the trademark department of the State Administration for Industry and Commerce on Jan. 9.

To contact the reporter on this story: Leslie A. Pappas in Beijing at correspondents@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com


Text of the Office of the USTR's 2013 Report to Congress on China's WTO compliance available at http://www.ustr.gov/sites/default/files/2013-Report-to-Congress-China-WTO-Compliance.pdf

The latest statistics from the State Administration for Industry and Commerce available (in Chinese) at http://www.saic.gov.cn/fwfz/zscqzl/201401/t20140109_141083.html

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