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China

China remains on the Priority Watch List and subject to Section 306 monitoring. China's enforcement of IPR, as well as its implementation of its WTO obligations, remains top priorities for the United States. China made constructive commitments related to intellectual property generally, and software legalization specifically, during the December 2010 Joint Commission on Commerce and Trade (JCCT) meeting, and during President Hu's visit to Washington in January 2011. The United States is focused on seeing significant and measureable progress on these commitments in the coming year.

The U.S. Government has been following closely the efforts under China's Special Campaign. If China makes permanent the temporary leadership structure created to manage the Special Campaign, including the key role for the Vice Premier, it could drive lasting improvements in IPR enforcement. The U.S. Government has also been following the development of China's indigenous innovation and other intellectual property-related industrial policies and is paying particularly close attention to China's policies that require or encourage U.S. parties to transfer their IPR to Chinese parties or to Chinese subsidiaries of U.S. firms. Innovation will produce greater societal and global gains when market participants, irrespective of their nationality or the places where they may own or develop intellectual property, are able to enjoy the fruits of their investments without the danger that their efforts, including in developing and commercializing intellectual property, will be undermined, or shared with others who did not undertake the initial risk. The United States encourages China to adopt policies that eliminate improper government intervention in intellectual property licensing and other lawful contractual business arrangements, and that welcome exports to and investments in China, irrespective of where the intellectual property in the products and services is owned or developed.

In October 2010, Premier Wen Jiabao announced the launch of the "Program for Special Campaign on Combating IPR Infringement and Manufacture and Sales of Counterfeiting and Shoddy Commodities" (Special Campaign).

The Special Campaign was originally slated to end in March 2011, but has been extended for another three months. Enforcement efforts in the Special Campaign are aimed at a broad range of intellectual property violations: IPR infringement over the Internet, such as through illegal downloads of music and movies; sale of pirated CDs and DVDs; infringing software; and trademark infringement, particularly related to counterfeit mobile phones, auto parts, bulk commodity exports, and pharmaceuticals. China's agencies are to summarize and report on lessons learned at the end of the Special Campaign. The Special Campaign is led by Vice Premier Wang Qishan, who chairs a national "leading group" that was established at the campaign's start. The leading group consists of 26 member agencies, and the leading coordinating office is based in China's Ministry of Commerce. Reports from industry stakeholders indicate that the high-level leadership structure of the Special