China Agrees to Police Theft of CDs, Software: Sanctions off; Pirate Factories Shut

Article excerpt

China has closed 19 factories that produced pirated copies of music CDs and computer software and will investigate 15 others, U.S. officials announced yesterday as they called off plans to impose heavy penalties on Chinese goods.

Officials in Beijing also agreed to open the Chinese market to U.S. producers of films and music, and will allow American industry and law enforcement officials to inspect plants there for evidence of violations of intellectual property rights.

"We've gone from the abstract to effective, concrete action," Commerce Secretary Mickey Kantor said. "This is trying to take an agreement and make sure it works."

The accord was reached yesterday in Beijing after four days of 'round-the-clock talks between Chinese trade officials and a U.S. delegation led since Friday by acting U.S. Trade Representative Charlene Barshefsky. The agreement will be formalized later in a letter to Mrs. Barshefsky from Chinese Foreign Trade Minister Wu Yi.

Critics of President Clinton's China policies pointed to Beijing's history of reaching last-minute deals to sidestep threats from the United States.

"We have been in this situation before. Up against a last-minute deadline, the Chinese promise us that they will act . . . then after the dust settles, it's back to the usual practice," said Kevin Kearns, president of a coalition trying to stop renewal of most-favored-nation trading status for China.

The new agreement, the Clinton administration said yesterday, puts specific details on promises that Beijing had made in more general terms more than a year ago.

In February 1995, just before heavy U.S. tariffs on Chinese goods were to take effect, China said it would combat piracy of intellectual property belonging to U.S. businesses - copyrighted items such as computer software, movie-laser discs and videos and music compact discs.

Yet American industry leaders said that continued wholesale piracy of such items by Chinese factories since then had robbed U.S. companies of some $2.5 billion in lost sales last year. In addition, they said the illegal copies were being exported from China.

The new pact specifies the enforcement steps that Beijing already has taken and will execute in the future. There will be an enforcement role for China's powerful Ministry of Public Security, which controls a nationwide police force.

"There's implementation. That's the critical nature of this," Mr. Kantor said in a briefing with reporters.

Mrs. Barshefsky had demanded earlier this year that China close some 40 factories suspected of producing pirated goods or face U.S. sanctions against $2 billion worth of its exports to the United States.

Administration officials said the deal made with China over the weekend, while falling short of that goal, satisfied Washington. …