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CHINA In its 2004 Special 301 report, USTR announced that it would conduct an out-of-cycle review (OCR) in early 2005 to evaluate China's implementation of its commitments made at the 15th annual meeting of the Joint Commission on Commerce and Trade (JCCT) in April 2004. During the OCR process, USTR requested detailed information on the prevalence of IPR infringement in China and the strengths and weaknesses of China's IPR protection and enforcement regimes. USTR also engaged with dozens of rights holders, interested members of the public and with Congress. This section contains USTR's analysis, findings and recommendations.

The United States recognizes that China, under the leadership of Vice Premier Wu Yi, has expended significant effort to improve the protection of IPR in China. Indeed, these efforts have resulted in progress in some areas. The United States remains gravely concerned, however, that China has not resolved critical deficiencies in IPR protection and enforcement and, as a result, infringements remain at epidemic levels. Accordingly, the United States concludes that there has not been a significant reduction in IPR infringements throughout China, as it committed to do at the April 2004 JCCT. Therefore, the United States will:

 Work with U.S. industry and other stakeholders with an eye toward utilizing WTO procedures to bring China into compliance with its WTO TRIPS obligations, particularly those requiring transparency and a criminal IPR enforcement system with deterrent effect.

Invoke the transparency provisions of the WTO TRIPS Agreement, which will require China to produce detailed documentation on certain aspects of IPR enforcement that affects U.S. rights under the TRIPS Agreement.

Elevate China onto the Priority Watch List on the basis of serious concerns about China's compliance with its WTO TRIPS obligations and commitments China made at the April 2004 JCCT to achieve a significant reduction in IPR infringement throughout China, and make progress in other areas.

Maintain Section 306 monitoring of China's implementation of its 1992 and 1995 bilateral agreements with the United States (including additional commitments made in 1996).

Use the JCCT, including the IPR Working Group, to secure new, specific commitments concerning additional actions that China will take to significantly improve IPR protection and enforcement, particularly over the next quarter. China's fulfillment of these commitments will be a centerpiece of the 2005 JCCT. 

China agreed at the April 2004 JCCT to take the following specific steps:

 Significantly reduce IPR infringement levels across the country; </ul>