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CHINA

China will remain on the Priority Watch List in 2009 and will remain subject to Section 306 monitoring. China's enforcement of IPR and compliance with its TRIPS Agreement obligations remain top priorities for the United States. The United States looks forward to working with China to implement the WTO Dispute Settlement Body's recommendations and rulings in the China – Measures Related to the Protection and Enforcement of Intellectual Property Rights dispute.

While the Chinese Government continues to provide increased attention to the IPR environment, the shared goal of significantly reducing IPR infringement throughout China has not yet been achieved. China's IPR enforcement regime remains largely ineffective and non-deterrent.

The United States also remains concerned by reports that officials, apparently motivated by the financial crisis and the need to maintain jobs, are urging more lenient enforcement of IPR laws. The United States believes that, consistent with the rule of law, IPR enforcement actions should be initiated, cases should be decided, and remedies should be granted based on the merits of the case and in accordance with the law. Moreover, a strengthened approach to IPR protection and enforcement in China would contribute to a more robust and innovative economy in the longer term.

Of particular concern is the rise of Internet piracy in China, especially given its emergence as a leading nation in terms of the number of Internet, broadband and mobile device users. Strong action to curb trademark counterfeiting and copyright piracy on the Internet is critical to the future of IPR protection in China. China should significantly increase criminal prosecutions and other enforcement actions against Internet-based piracy and counterfeiting operations through a coordinated, national effort backed by appropriate resources. During the Beijing Olympics, the Chinese Government went to unprecedented lengths to launch a coordinated crackdown on the unauthorized retransmission of sporting events as well as online activities related to the Olympic Games. These efforts reportedly resulted in 453 online infringement cases, through which 192 sites were shut down, 173 sites were required to remove infringing content, 88 sites received administrative punishment, and infringing activities related to 10 sites were transferred for criminal prosecution. This experience shows that when the Chinese Government chooses to exercise its political will to deal with an IPR problem, it can yield results. We urge the Chinese Government to demonstrate this resolve generally when fighting piracy and counterfeiting on the Internet.

Retail and wholesale trademark counterfeiting in China continues to be a major source of frustration for international brand owners. In spite of significant attention and resources from brand owners, administrative supervision, civil lawsuits, agreements with landlords, and attention from China's central Government and foreign governments, counterfeiting remains pervasive in many retail and wholesale markets. It appears that additional measures, including