China no longer a pirates’ haven

China is the new super tanker of the world economy. But trailing behind this super tanker is a fleet of pirates.

These pirates are responsible for around 60% of all the counterfeited goods that reach Europe’s borders, a jumble of products from dodgy DVDs, fake medicines to phoney car parts. It is unsurprising that an economy that is growing so fast in legitimate markets also has a sizeable black market. It is also unsurprising that western governments see better protection against intellectual property theft as essential: Peter Mandelson, the European trade commissioner, has declared that this is a key priority for the EU-China trade dialogue. But it is perhaps less well known that China also wants to tackle intellectual property theft.

And it is a big problem for China. China watchers say there has been a shift at the highest levels in China from official indifference to increasing awareness of the costs of intellectual-property fraud. Chinese business is a big loser. Intellectual-property fraud slows down the development of more high-value production and discourages innovation. The Chinese government is taking enforcement more seriously. Earlier this year, it set up 50 intellectual property complaints centres to offer practical advice to businesses in tackling intellectual property theft. The authorities have also begun to prosecute landlords who permit counterfeit business to operate on their premises. Beijing’s Silk Market, notorious for its fake designer handbags and T-shirts has been one high-profile target of this strategy.

China has also signed up to an Intellectual Property dialogue with the EU. A spokesman at the European Commission said that the Chinese government was "very much committed to enforcing intellectual property law". He considered that the proof of whether they adhere to these principles would be tested by their focus on enforcement.

But on this score, there is still a long way to go. Andrew Small, a programme associate at the German Marshall Fund in Brussels, thinks that the Chinese government still has a problem meeting its obligations. He says that "the will to implement does not go right down the enforcement chain… local officials do not have much incentive to follow through [on intellectual property law]". Part of the problem is that the police have inadequate training and prosecutions can only proceed when the amount of counterfeited goods exceeds a certain threshold. Small adds that "the showpiece crackdowns" such as Silk Market have not gone far into the provinces.

The pressure may come from Chinese businesses. Already four of five cases concerning intellectual property litigation in China exclusively concern Chinese firms - although some think this may be because foreign companies are pessimistic about their prospects for redress. Earlier this year Hu Zuochao, vice-president of the Patent Protection Association of China, told the Chinese media that it was "an encouraging sign that Chinese companies have become mature in using Intellectual Property Rights to protect their interests". They could be a growing force to take on the pirates.

• Jennifer Rankin works for The Economist in Brussels.

China is the new super tanker of the world economy. But trailing behind this super tanker is a fleet of pirates.

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