Why is there so much intellectual piracy in China?Recently China has taken a number of important steps towards appeasing the international community's concerns regarding intellectual piracy within China (Paradise, 2005 and Dao Wen, 2004). It has enacted legislation on patents, trademarks, copyrights and computer software (Paradise, 2005). Despite these measures intellectual piracy remains commonplace in China, and China has the worst piracy rate in the world; in fact 92 percent of the software in China is pirated (Williams, 2004 and Cain, 2004). This discrepancy between the widespread existence of pirated goods and China's seemingly proactive measures for cracking down on intellectual ...view middle of the document...
Hornbrook (2006) also agrees stating that "the domestic competition is so intense; a pirate must export to survive".The demand for pirated goods is however just one part of the reason why there is so much intellectual piracy in China. Of far greater significance in explaining this problem is that piracy is an integral part of the Chinese economy. Piracy is so important to the Chinese economy that if it were removed the Chinese economy would quite simply collapse. Everything from compact discs to cars is made illegally in China. Counterfeit goods and substandard goods account for 40% of all products made in China (Gilley, 2001). There are copious amounts of people and warehouses creating copyrighted products. It is impossible to specify exactly how many different sources of illegal goods are in existence; however the underground economy is estimated to be the equivalent to 20% to 40% of the Gross Domestic Product (GDP) (Gilley, 2001). In fact, a Chinese consumer's chance of purchasing a counterfeit product instead of a premium branded product inadvertently are 6:1 (Jacob, 2000).There are a multitude of reasons for the prevalence of the production of these pirated goods; however a major cause of the epidemic of intellectual piracy in China is that these goods don't have to be put through the same safety inspections that premium brands do. This economic benefit can sometimes have disastrous consequences such as in 1999, when dozens of people were blinded and ten died from the production of counterfeit rice wines (Behar, 2000). Furthermore, on another occasion extension cords shipped to the U.S. had false Underwriter Laboratories seals on them and were prone to causing fires (Lief, 1997); however their production along with a multitude of other products is the backbone of a booming Chinese economy, which is estimated to be a 16 billion dollar a year business (Behar, 2000).Despite the Chinese government's recent attempts to appease the international community with anti-piracy legislation, it is obvious that they are not serious about tackling intellectual piracy as not a single foreign trademark is officially recognised by the Chinese government (Rohde, 2004). The only brands that are officially recognised and that bring severe punishment if copied are the 200 trademarks that have been registered to famous Chinese brands (McCallum, 2002).However, any serious attempt to crack down of piracy within China would still have to overcome the severe difficulties presented by the fragmented nature of the Chinese political system; a system that still provides tacit approval for this commonly accepted illegal practice (Paradise, 2005). In fact, leaders of local government bureaucracies are often intimately involved with companies that profit from pirated goods (Rohde, 2004). "Very often the priorities of these front-line enforcement agencies (or their immediate superiors) compete with, even run counter to, the imperatives of Intellectual Property Right...
