Advancing Intellectual Property Rights: Information Technologies and the Course of Economic Development in China
NBR Analysis vol. 7, no. 4

Advancing Intellectual Property Rights
Information Technologies and the Course of Economic Development in China

by Michel Oksenberg, Pitman B. Potter, and William B. Abnett
November 1, 1996

This study found that a window of opportunity exists to influence the future handling of IPR cases in China and became the foundation of subsequent work in the field. It found that a program that contributes expertise and highlights the benefits of a more effective dispute resolution system could play a decisive role in the outcome of current reform efforts.

China represents a potentially vast market for the sale and licensing of intellectual-property based goods and services, particularly computer software and information technologies. From 1993 to 1995, sales in China of software products increased at an annual rate of 30 percent. Software imports from the United States also rapidly increased, and could significantly reduce the U.S. trade deficit with China over the long term. For now, however, the Chinese market for software is dominated by suppliers of illegally copied products. This widespread disregard for intellectual property rights is an area of great concern for all high-technology firms operating in the Chinese market. It also constitutes a potentially serious obstacle to the development of a vibrant information-technology industry in China. In addition, pirated items manufactured in China, especially computer software, are found in markets throughout East and Southeast Asia. Estimates of losses to American companies due to infringements of intellectual property rights (IPR) of all kinds total well over a billion dollars annually, based on the retail value of the pirated commodities in the United States.