China / US trade dispute lends urgency to piracy challenge

Valerie | 17 Aug 2009, 13:49

China is “actively” getting ready to appeal a World Trade Organization decision that calls for it to end restrictions on the import of US film and music products, a decision which could see diminishing demand for pirated goods.

The WTO panel said last week that China’s import and distribution regime for books and films violates international trade rules and should be revised. The Chinese import restrictions have been blamed for making fewer legal goods available and thus helping pirates profit and proliferate.

The US welcomed the WTO ruling as a “significant victory to America’s creative industries” which would help open up Chinese markets for everything from magazines to movie blockbusters as well as curbing rampant intellectual piracy, highlighting the increasing global importance of the Chinese market.

As this article argues, there is still a long way to go in a country where a pirated DVD is easily available for a third of the price of a movie ticket — often before the movie opens in Asian cinemas. It argues that the strictest enforcement of intellectual property laws are needed before US companies can reap big benefits.

The IFPI (International Federation of the Phonographic Industry) said last year that more than 99 percent of all music files distributed in China are pirated, and the country’s total legitimate music market, at $76 million, accounts for less than 1 percent of global recorded music sales.

Google and global music labels launched an advertising-supported free music download service in March to compete with pirates, a service it does not offer anywhere else in the world. The move was widely seen as a bid that the demand for music downloads would raise its profile in China, where it trails search leader Baidu.com. However, it is also the first serious attempt to monetize the online market in China .

Kai-fu Lee, the president of Google Greater China, said:

“This is a huge leap of faith for us. We hope this will move the landscape to a legal model.”