IFPI applauds success of US-Chinese trade negotiations on Intellectual Property reform

April 22, 2004

The International Recording Industry would like to congratulate the U.S.-China Joint Commission on Commerce and Trade in Washington for having announced a series of new initiatives intended to reduce the crippling levels of piracy and counterfeiting in China.

The enforcement of Intellectual Property (IP) rights in China has been a top priority for a record industry that has seen its local market decimated by a piracy level in excess of 90%. A historic pledge like the one made by Chinese Vice Premier Wu Yi last night is a huge step forward in the fight against one of the highest rates of piracy in the world.

Richard Denekamp, Chairman of the Asia Pacific Board of IFPI said: "Weak intellectual property protection in China has seriously hurt the international and domestic IP industries and the reputation of this great country. The biggest victims are the Chinese cultural and entertainment industries, because piracy eliminates all incentives for sustainable investment, impacting greatly upon cultural and economic development."

"We are very hopeful that Mme. Wu Yi's latest announcement of this ground-breaking commitment to IP protection will result in a major improvement in China. We welcome this initiative on piracy and hope that additional market-opening initiatives will follow shortly. It is important that the Chinese government will recognize that IP protection is about nurturing an industry in a market driven economy, and is not an ideological debate. By protecting China's cultural industry it will give it a chance to make its mark on the world stage, as so many other Chinese industries have already done."

The Chinese government has committed to crack down on pirates of physical goods in a nationwide campaign coordinated at the national, provincial and local level by the Vice Premier herself. Furthermore it will toughen punishment of IP right violations by criminally prosecuting those responsible for physical and online commercial piracy. Finally, in a move to tackle the growing problem of Internet piracy in the country, it has pledged to amend China's laws and ratify modern international conventions so that sound recordings transmitted on the Internet are protected and remedies provided against online pirates.

These are critical commitments on behalf of the Chinese government. To date, legitimate sales of sound recordings stood at $US110 million in 2002 whilst pirate sales are estimated to be worth $US533 million. Chinese recording companies have been struggling to make a profit with only one in ten music products sold legally, and have not been able to invest in local artists or even a business infrastructure.

While the international recording industry commends the Chinese government for today's announcement, it would like to see more than a commitment on paper. Together with the RIAA it calls on Mme. Wu Yi to accomplish a reduction of piracy by 50% from its current levels by the end of the year, with further verifiable and significant reductions in the following years so that legitimate business can expand and TRIPS level enforcement be achieved.

For further information contact Julie Harari at IFPI on +44 (0)20 7878 7800 or Jonathan Lamy at th