U.S. companies in China ask Obama for help on piracy

A U.S. business association in China said today it looks forward to working with President Obama on increased protection of intellectual property rights in the country.

The American Chamber of Commerce in China also wants to work with the Obama administration on clearing trade barriers and promoting clean energy sources, it said in a statement one day after the president arrived on his first trip to China. Pirated video games, DVDs and computer software are widely sold on streets and in markets in China, and U.S. officials have long pressed China to improve enforcement of intellectual property laws. Pirated versions of Windows 7, for instance, were on sale in a Beijing bazaar weeks before the real program went on sale last month.

But the U.S. government could potentially recognize Chinese progress on intellectual property when it concludes a review of the matter. The area is one that the U.S. is reviewing as it considers recognizing China as a market economy, said U.S. Commerce Secretary Gary Locke in a speech to the business group in Beijing. U.S. Trade Representative Ron Kirk also spoke ahead of talks with members of the group.

Many observers say intellectual property protection has improved in China in recent years. "The Chinese government has moved from zero to 200 miles per hour faster than any country," said Mark Blaxill, a managing partner at 3LP Advisors, a provider of intellectual property strategy services. "The Chinese government really gets intellectual property rights."

But local authorities could do more, he said. A lack of intellectual property, low profits and a weak brand overseas are mutually reinforcing for many Chinese companies trying to climb out of manufacturing, said Blaxill. The Chinese government should subsidize the creation of patent pools or help organize industry groups so more local companies can get their own intellectual property, he said.

"They can buy their way out of the problem," said Blaxill.

Locke also told the business group that allowing more exports of high-tech products, the subject of another ongoing government review, could help reduce the U.S. trade deficit with China. The U.S. restricts the sale of certain high-tech products because of national security concerns -- but some of the restrictions are needless because they affect products that are not sensitive, or that China can simply buy from another country, such as France, Locke said.

"If you can even buy it from Radio Shack or Home Depot," he said, "why does the United States make it so difficult for U.S. companies to sell that very same product or technology in other countries?" An ongoing federal review could lift some of those controls, he said.

Copyright © 2009 IDG Communications, Inc.

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