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 industry, the site raided was a packing center and the 30 machines seized were for erasing embossed SID codes from optical discs. The U.S. Government applauds this action and encourages authorities to pursue criminal actions against unauthorized optical disc manufacturing, and to follow through with convictions and deterrent penalties. Industry reports that it has been actively seeking criminal prosecutions in connection with at least seven optical disc factories in Guangdong, so far without success.

Retail and wholesale markets. Local authorities in Guangdong have achieved mixed results in their efforts to address piracy and counterfeiting in retail and wholesale markets.

 Among other problem areas, rights holders cited Ziyuangang Market in Guangzhou and Lowu market in Shenzhen.

An industry survey of CD/DVD shops showed that the 2006 "100-day campaign" had a significant impact in the city of Guangzhou, reducing the estimated rate of pirated product offered for sale from 48 percent to 18 percent.

Conversely, in the city of Shenzhen the same survey found no positive effect of the 100-day campaign on the amount of pirated product offered for sale (82 percent before the campaign, 88 percent during the campaign).

Guangdong administrative authorities have indicated that they will begin to pay more attention to the responsibility of landlords to self-police infringing markets. This is a welcome development. 

Internet. Guangdong is increasingly a center for Internet piracy. It has taken some positive actions in this area, but, like the rest of China, faces serious challenges.

 Guangdong is in the top five in China in number of notices for alleged Internet infringement sent by a recording industry group.

Industry commended Guangdong authorities for taking action against a family of sites offering free downloads of books and other materials, while awaiting action on other sites that had been the subject of complaints.

<li>Trademark owners are increasingly concerned about use of the Internet, in connection with express delivery services, for direct marketing of counterfeit products to foreign consumers.</li> </ul>

Universities. Industry praised a decision by Guangdong authorities to time inspections of university textbook centers to coincide with the beginning of school terms. However, rights holders remain concerned by the lack of transparency in the process of inspection and punishment decisions.

Jiangsu Province is another large-scale manufacturing center in China. Jiangsu has been recognized for its innovative and proactive IPR protection and enforcement efforts, including promulgation of local regulations and policies, and engagement with domestic and foreign institutions on IPR training and cooperation. For example, in 2006 Jiangsu IPR authorities published a guide for investors on IPR protection in Jiangsu. In early 2007, Jiangsu officially entered into a cooperative IPR program with the U.S. Chamber of Commerce.