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 SECTION II. COUNTRY REPORTS

CHINA

China remains on the Priority Watch List and subject to Section 306 monitoring in 2015.

China's leadership has acknowledged the critical role that IPR plays in spurring innovation and the need to improve China's protection and enforcement of IPR. Consistent with China's policy objectives, the country's judicial, legislative, administrative, and enforcement authorities continue to pursue wide-ranging legal reform efforts relating to the protection and enforcement of IPR in China. Individual rights holders report a greater ability to obtain relief, including temporary injunctive relief, against infringers in civil court actions. The United States also notes increased cooperation between U.S. and Chinese law enforcement agencies in an effort to stem cross-border flows of infringing products. The United States looks forward to strengthened cooperation, building on the increasing and positive cooperation between U.S. customs and investigative agencies and their Chinese counterparts, including the General Administration of China Customs (GACC) and the Ministry of Public Security (MPS).

Notwithstanding the generally positive effects of these reform efforts, several recent measures relating to ICT products, services, and technologies, have caused sharply adverse impacts on U.S. companies and raise serious concerns. Although one of the measures is in draft form and the other was recently suspended, the measures would impose certain trade-restrictive IPR-, R&D-, and encryption-related requirements on ICT products, services and technologies used in certain sectors of China's economy. The United States welcomes the recent suspension, but underscores that it is critical that China reconsider its approach to certain ICT issues and engage closely with governments and industry as it does so.

Independent of the new measures, a wide range of U.S. stakeholders in China continues to report serious obstacles to effective protection of IPR in all forms, including patents, copyrights, trademarks, trade secrets, and protection of pharmaceutical test data. As a result, sales of IPR-intensive goods and services in China remain disproportionately low when compared to sales in similar, or even less developed, markets that provide a stronger environment for IPR protection and market access. Despite laudable policy objectives and a welcome ongoing reform effort, foreign rights holders in China continue to face a complex and challenging IPR environment. Given the size of China's consumer marketplace and its global importance as a producer of a broad range of products, China's protection and enforcement of IPR continues to be a focus of U.S. trade policy. 32