U.S. And China At Odds Over Protection Of Intellectual Property

The U.S. has brought a trade dispute with China to the WTO over the widespread abuse of intellectual property in China, where widespread counterfeiting of computer software, books, movies and music is very common. It is also considered to be worth as much as $250 billion in the trade deficit with China.

Under Chinese law, it must be proven that a counterfeiting business has grossed more than $30,000 on any particular item, making prosecutions very difficult. And entire software programs such Windows Operating systems are sometimes sold for only $1 over in China, and movies or cds for about $1-$2 each.

While the problem of this rampant Chinese counterfeiting is very serious and producers of intellectual property no doubt have investments in movie production or other costs, American producers might need to offer better prices on imports to China to more effectively compete with the lower salaries of these workers to counter this problem. Overpriced American products might be at a huge disadvantage in such a society in which many workers only earn around 40cents an hour, and American cds or movies could go for $15-20.

It would be an important goal to bring down the huge trade deficit if only the U.S. could reduce couterfeiting in China, while improving the number of American entertainment and software legal exports or legally contracted items by Chinese manufacturers. But any goods have to be priced so as to be affordable by the lower paid Chinese workers, otherwise the problem will only continue.