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CHINA China does not provide American copyright materials, inventions, brands, and trade secrets the intellectual property protection and enforcement to which they are entitled. China therefore remains a top intellectual property enforcement priority. China will remain on the Priority Watch List, and remain subject to Section 306 monitoring. Faced with only limited progress by China in addressing certain deficiencies in IPR protection and enforcement, the United States will step up consideration of its WTO dispute settlement options.

In addition, the United States will conduct a special provincial review in the coming year to examine the adequacy and effectiveness of IPR protection and enforcement at the provincial level. The goal of this review will be to spotlight strengths, weaknesses, and inconsistencies in and among specific jurisdictions, and to inform next year's Special 301 review of China as a whole. USTR expects to seek public comments in connection with the special provincial review.

The United States is using this year's Special 301 Report to examine four "hot spots" – Guangdong Province, Beijing City, Zhejiang Province, and Fujian Province – where, it appears, there is an acute need for authorities to more effectively establish and sustain proactive, deterrent IPR enforcement.

The United States recognizes and appreciates the efforts of the many officials in China, led by President Hu Jintao and Vice Premier Wu Yi, who continue to give voice to China's commitment to protecting intellectual property rights and work hard to make it a reality. In spite of these efforts, the reality of IPR enforcement in China continues to lag far behind the commitment made by China's government at the Joint Commission on Commerce and Trade in 2004, and renewed in 2005 and 2006, to achieve a significant reduction in IPR infringement throughout China.

China has made welcome progress in some areas. Consistent with the plan laid out in last year's Special 301 Report, the United States has used the JCCT, including the IPR Working Group, to secure new, specific IPR commitments, and in a few instances, specific actions to implement existing commitments. Some of the key IPR results included:

 enforcement actions by China against plants that produce pirated optical discs;

new rules that require computers to be pre-installed with licensed operating system software;

an agreement to work on cooperation to combat pirated goods displayed at trade fairs in China;

a commitment to intensify efforts to eliminate infringing products at major consumer markets in China, such as Silk Street Market in Beijing; and 