China has revised many of its intellectual property rights (IPR) laws but is still struggling to enforce the rights of brand owners, according to the Office of the US Trade Representative (USTR).
In its latest report on China's compliance with World Trade Organisation (WTO) commitments, including those relating to IPR protection, since it acceded to the group 12 years ago. China is a critical market for US industry, with exports running at $110bn in 2012, almost five times the level shipped in 2001.
IP issues have long been a point of contention between the two nations, although the USTR report acknowledges China's "wide-ranging" efforts to revise laws and regulations governing the protection of IPR in recent years.
The USTR would like to see further revisions to bring online copyright protection into line with World Intellectual Property Organization (WIPO) Internet treaties, an update to laws on trade secrets and "correction of continuing deficiencies in China's criminal IPR enforcement measures."
"Despite repeated anti-piracy campaigns in China and an increasing number of civil IPR cases in Chinese courts, counterfeiting and piracy remain at unacceptably high levels and continue to cause serious harm to US businesses across many sectors of the economy," concludes the report, which puts those losses at around $48bn in 2011.
The US has China on its Priority Watch list for IPR, although it says progress has been made on some issues such as the use of pirated software.
Meanwhile, the report suggests some trademark rights holders are starting to report a noticeable reduction in the visibility of counterfeit goods for sale in certain major retail and wholesale markets in China, which it attributes to "intensified administrative and criminal enforcement in certain areas."
Cooperation between the US and China has already led to successful enforcement actions against infringements in areas such as media, high-tech industries such as automobile components and medicines, as well as agriculture.
After all, the Chinese government also has a lot to lose from IPR-related crime. The country estimated its own annual tax losses due to counterfeiting were more than $3.2bn in 2002, and the USTR report notes this figure "could only have grown in the ensuing years."