Washington (DC) - The United States has filed two trade complaints of movie, music and book piracy against China.  U.S. Trade representative Susan Schwab filed the complaints with the World Trade Organization in Geneva and alleged that American companies lose billions of dollars a year to Chinese piracy.

Schwab told reporters at a press conference that a combination of lax enforcement and illegal barriers to American products contribute to the piracy problem and the ballooning U.S. trade deficit with China.  In the first complaint Schwab alleges that China does not adequately prosecute pirate goods vendors.

Chinese officials countered by saying that they are doing everything they can to stop the piracy.  China’s highest court recently issued updated guidelines on sentencing allowing vendors with more than 500 illegal copies to be prosecuted.  Vendors with more than 2500 copies can be sent to prison for up to seven years.

In the second complaint, the United States says that China makes it prohibitively difficult for Chinese residents to buy imported American goods.  The scarcity of authentic goods would presumably lead to a greater demand for counterfeit goods.

During the press conference, Schwab held up an illegal DVD copy of “Night at the Museum” which has been available for weeks before the official April 24th release.  Movie pirates are often able to make copies from the screening reels and even the actual movie reels sent to the theatres.  Some pirates even resort to using camcorders to film the movie from their theatre seats.

Chinese Commerce Ministry Spokesman Wang Xinpei said the complaints were counterproductive to trade relations between the two countries.  He added that China remains “firm in protecting” intellectual property rights.


These two trade complaints are in addition to one filed last month against China for subsidizing coated and glossy paper imports into the United States.  The paper is used in everything from wall calendars to magazines and school yearbooks.  The United States runs month trade deficits with China for several billion dollars.  In 2006, the total trade deficit with China was a staggering $235 billion dollars.

Business Instructor

Apr 10, 2007 14:06     

I've expected for quite some time that piracy is a lont-term trend and will continue. One hundred years ago, entertainment was not a mult-billion dollar industry nor a sure way to get rich. It has only been within the last 50 years that the rapid growth in communication and distribution has created this artificial surge in entertainment profits. This is not a sustainable equilibrium. We will not see this continue. Record, movie, sports, and other medias should expect erosion. Recently, communication and distribtution was a near-oligopoly with few gate-keepers controling the system, and reaping extra-ordinary profits. As these powers are returned to their rightful owners (consumers), we can expect a new equilibrium. It's predictable that many existing market players will attempt a defensive strategy attempting to protect markets and market share with protectionism, legal-wrangling, and other simliar methods that have been tried before (can anyone say 'import quotas'). However, it is equally predictable that this will not be a successful strategy in the long-term, and we can expect the super-normal profits of the recent past to deteriorate. Power to the people. Long live P2P!

Peter Morgan report abuse vote down vote up Votes: +0

Response to Peter Morgan

Apr 10, 2007 15:55     

I believe it is a sustainable equilibrium. The difference is what company is making all the money. At the moment the entertainment companies are losing ground to the internet, computers, video games, user created content, etc. It isn't that the market is going down. Actually, I believe it is going up. More people are buying it. The difference is that there are so many more players in the market that those major media companies can't be making the large shares that they were before. Companies like Google and other tech/internet companies are taking over where those companies were strongest. And I don't really foresee them being able to keep up their old profits with so many new and different options for consumers.

Demexii report abuse vote down vote up Votes: +0

Piracy???

Apr 10, 2007 16:23     

Hasn't anyone besides me grown weary of the term "piracy"? Come on people, it is copying, counterfeiting, and stealing that is going on, not piracy. Pirates use knives, guns, force, and brutality to get what they want. No one here is being killed and physically harmed. Let's start calling it what it is, not hyping it up to get some media azttention.
RC report abuse vote down vote up Votes: +1

China, Yuan, Paulson and inflation

Apr 10, 2007 16:57     

Now China will take retaliations with the US. US vs. China means that China will move some of his trillion dollars reserves to euros, or other currencies. Means what: The dollar will go down. And the comercial deficit with CHINA will grow. The US Treasure Secretary Paulson is not to happy with the White House and Wall Street is mixed about. Do you know what will happend with the american economy? Will go down more that already did. A strong chinese yuan, a weak US Dollar is a recipy for disaster as well with the fiscal deficit in the US and the funding of the wars. This is not about only copyright and US companies loosing billions, is about WAR , comercial war with the most powerful producer and consumer in the world. AND CHENEY will be behind it too.

Bur$atil report abuse vote down vote up Votes: +0

I can't afford pirated copies...

Apr 10, 2007 17:11     

Oh dear! My job was shipped to China and now I can't even afford a copy! Whatever will I do? Nobody is filing any complaints about my lost jobs... Oh did Circuit City just lay off 30,000 because the workers selling and installing the chinese products were being overpaid at $11 to $14 per hour? Oh dear! Gimme a break! Pretty soon, American workers will be reduced to the level of a Chinese worker. And all my country can do is file a crummy complaint protecting CD's and DVD's?

Mags report abuse vote down vote up Votes: +0

Microsoft

Apr 10, 2007 18:53     

This reminds me of when Microsoft began jumping on small governments on using copied versions of Windows. The response was, "Ok, we will now use (free & legal)Linux & Star Office now". I personlly think service is what people want to pay for, not licenses.
Erric report abuse vote down vote up Votes: +0

Moan moan moan

Apr 10, 2007 22:21     

If the media industry doesn't like the way China plays, then they should stop doing business with them. It really is that simple. The same holds true for oil; if we do not like the way Iran treats its neighbors, then we should start producing more corn for ethanol and stop purchasing oil from Iran. I'm with Peter, complaints and legal sanctions etc. are not going to work in the long run, only real action will receive a real response, and if the entertainment/software industry wants to make a statement they should find the gumption to do something about it themselves.

Matt report abuse vote down vote up Votes: +0

What a joke

Apr 13, 2007 10:54     

The US (really the corporations) has nerve complaining about the Chinese pirating software or any kind of merchandise, while at the same time exploiting them for their dirt cheap sweatshop labor, and turning their backs on the job loss here at home. As much as you'd like to please your wealthy stockholders, you can't have your cake and eat it too. Please spare us of this propaganda, because as you can tellby reading these comments, nobody cares. What they should do is vote out their corporate-bought-and-paid-for congresspeople to stop this BS.

LB report abuse vote down vote up Votes: +0

What A JOKE!! pt2

Oct 01, 2007 16:57     

LB, i have to say, that your comments hit SQUARE ON THE NOSE.. US companies, say one thing, yet do another. China is clearly a country that profits on other peoples work. They make products better, but in a way, that CHEAPER =BETTER in most peoples minds. EVERY thing now adays come from China. And it is flat out depressing. All the clothes, EVEN the bulk of our food is made/produced in I am at the point that i try and avoid buying Chinese made products. JUST based on the fact that 1% of the people there, are making any $$$ towards any of the products i BUY. SO with that , EMBARGO.. And yes, i dont buy movies ( i may rent), i dont buy Music (FM radio for the Win), Picky on the FOOD (lost 5lbs in 2 months), No foreign cars for me.. Computers well i have to have just to post, but it is a step in right direction. Once China decides to Bang us economically, in which THEY WILL, we are in a world of hurt

rippleyaliens report abuse vote down vote up Votes: +0