China Agrees to Intellectual Property Protections - 12/16/2010

WASHINGTON — Senior Chinese officials pledged on Wednesday to better crack down on software piracy and other violations of intellectual property rights as part of a series of commercial agreements after two days of talks here.

The Chinese delegation, led by Wang Qishan, the vice premier for economic matters, also agreed to lift certain barriers to imports of heavy industrial machinery and to hold talks on easing a ban on imports of American beef that was imposed during a 2003 scare over mad cow disease.

The talks, which took place during an annual forum known as the United States-China Joint Commission on Commerce and Trade, did not address the thorniest issues in the economic relations between the two countries, like the giant trade imbalance and the value of China’s currency. But the largely technical discussions helped set the stage for a state visit by President Hu Jintao to Washington next month, officials on both sides said.

"The two sides have had candid exchanges of views on China-U.S. economic cooperation,” Mr. Wang said in a joint news conference with his American counterparts: Ron Kirk, the United States trade representative; Gary Locke, the commerce secretary; and Tom Vilsack, the agriculture secretary.

Mr. Kirk praised Mr. Wang for agreeing to personally oversee a public campaign to reduce rampant theft of intellectual property — copyrights, trademarks, patents and trade secrets — in China. "We expect to see concrete and measurable results on issues like intellectual property rights, including increased purchase and use of legal software in China,” he said.

The Chinese government agreed Wednesday to allocate government money to buy legal software and to better track the management of software in state-owned enterprises. The effort will also include a crackdown on piracy of electronic journals, more effective rules for halting Internet piracy, and a crackdown on landlords who rent space to counterfeiters of products like footwear and apparel.

The involvement of Mr. Wang, China’s top economic policy maker, could be significant, because in China, difficult changes are sometimes made only when a senior official publicly takes responsibility for them.

However, a major association of software makers offered a wary response to those pledges.

"We will know China has made real progress in reducing piracy only when software companies start seeing substantial increases in sales,” said Robert W. Holleyman II, the president of the association, the Business Software Alliance.

The commercial value of pirated software for personal computers in China has nearly doubled, to $7.6 billion last year, he said. "That is why we have called for trade negotiations to start focusing less on pledges and more on tangible results,” Mr. Holleyman added.

Chinese officials also tried to address American reservations about a policy, intended to promote "indigenous innovation,” that American exporters view as potentially discriminatory.

Senior Chinese officials had said earlier this autumn that the policy would not require that national government agencies buy only products with technology initially patented or trademarked in China, a stance they reaffirmed on Wednesday. But the final language still has to be decided. Meanwhile, provincial and municipal government agencies seem to be officially or unofficially implementing similar policies without waiting for Beijing.

After years of stop-and-start talks on tough restrictions that effectively amount to a ban on American beef imports, both sides essentially agreed to start a new round of discussions.

The goal is to permit, by next year, some imports of beef from cattle under 30 months old.

In the agreements signed on Wednesday, Chinese officials said they would take these steps:

¶Revise a catalog of heavy machinery and other industrial equipment so as not to discriminate against foreign suppliers or provide prohibited subsidies. The catalog is used to encourage the development of machines that are not currently produced by Chinese companies.

¶Cooperate with the United States on technological standards for so-called smart grids, electricity networks that use digital technology to conserve energy and save money.

¶Remain neutral on wireless technologies like 3G, as well as future technologies, a step that is intended to ease access to China’s market by American telecommunications companies.

¶Lift one barrier to foreign developers seeking to build wind farms there. The Chinese government will allow overseas experience in wind farm development, and not just experience in China, to qualify them for Chinese projects.

The talks did not cover the value of China’s currency, the renminbi, which has been an irritant to the Obama administration. But the issue was raised when Mr. Wang met with the Treasury secretary, Timothy F. Geithner, on Tuesday. Mr. Locke said the forum was crucial in rebalancing the global economy.

"The reality is that if we are to close the trade deficit, Americans need to export more and the Chinese need to purchase more,” he said.

Keith Bradsher contributed reporting from Hong Kong.

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