China piracy costs almost million jobs: US study

May 19, 2011 by Shaun Tandon
File photo Chinese select latest pirated DVDs on sale at a subway in Beijing, 21 August 2007. The United States asked the World Trade Organization to mediate a copyright trade dispute with China, saying bilateral talks have failed to close loopholes that allow counterfeiters to flourish as Chinese-made counterfeit goods -- from software and DVDs to luxury leather goods and watches -- are widely available in the US market. AFP PHOTO/TEH ENG KOON

US firms could support nearly one million more jobs if China stopped intellectual property violations, a study said, leading US lawmakers to call for a tough line with Beijing.

In a report requested by senators, the US International Trade Commission surveyed US businesses and estimated that they lost some $48 billion in 2009 due to infringement of rights by China.

If China raised its enforcement to US levels, the companies could increase employment at home by 923,000 jobs, the survey said. However, the figure includes hiring from other companies, not just new jobs in the sector.

The commission gave an even higher estimate when it relied on a rather than its survey. It said up to 2.1 million jobs could be supported if China cracked down on rampant piracy in areas such as software and movies.

Max Baucus, the chairman of the that sought the study, said China's trade practices were costing the "billions of dollars and millions of jobs."

"We cannot pretend that there aren't real consequences to these violations when these numbers show that millions of American jobs are on the line," said Baucus, a member of President Barack Obama's Democratic Party.

Chart showing the rising number of complaints lodged in the US against imported goods suspected of infringing intellectual property rights.

The report was released as trade officials from 21 Asia-Pacific economies met at the Big Sky ski resort in Montana, the home state of Baucus who pressed to host the session of the Asia-Pacific Economic Cooperation (APEC) forum.

Baucus hoped that the Big Sky meeting would help to "break down trade barriers and make it cheaper, faster and easier for US small businesses to export to these lucrative markets."

Senator Chuck Grassley, a member of the rival Republican Party, said the study showed the need to seek rigorous protections of when negotiating trade deals.

"China wants the benefits of an economic relationship with the United States but won't hold up its end of the bargain," the Iowa senator said.

The United States and China, the world's two largest economies, have long sparred on trade with a number of US lawmakers accusing the emerging giant of unfairly supporting its industries to fuel exports.

File photo shows people choosing pirated movies at a park in Beijing. US firms could support nearly one million more jobs if China stopped intellectual property violations, a study said, leading US lawmakers to criticize Beijing's trade practices.

During talks earlier this month in Washington, Vice Premier Wang Qishan rejected suggestions that China's growth came through artificial measures such as a devalued currency and urged the United States not to "politicize" economic relations.

During the talks, the United States said that China promised to improve protection of and also avoid preferences for Chinese businesses in awarding contracts -- another key concern for US firms.

The Obama administration has sought to ease tensions with on a number of fronts. The United States is this week welcoming the chief of China's military for the first time in seven years.

China's piracy is also a problem for other countries' companies. An official study in Beijing recently found that pirated software cost the domestic industry 130.9 billion yuan ($20.1 billion) in 2010.

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User comments : 14

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epsi00
3.7 / 5 (3) May 19, 2011
When you run out of excuses for loss of jobs and lack of government incentives to create new jobs blame the Chinese But hey it's not the Chinese who stole 90% of American manufacturing jobs...It's corporate America that off-shored them and continue to do so with other categories of jobs ( call centers...)Smoke and mirrors.
bloodyanarch
4 / 5 (4) May 19, 2011
OK so what it sounds like they are saying is that because of piracy, $48 billion was lost in profits and that of course if
these wonderfull loving companies had those profits they would spend it on creating more jobs? Really.
Modernmystic
1 / 5 (3) May 19, 2011
So, what I'm hearing you two say is that you advocate criminal behavior...because corporate America is offensive to you. Is that correct?
Shaffer
3 / 5 (2) May 19, 2011
So, what I'm hearing you two say is that you advocate criminal behavior...because corporate America is offensive to you. Is that correct?


On the nose...count me in...and most of the people I know as well.

Of course, in China, this isn't criminal behavior, it's just business.

If they can't make it fair for the citizens of the country that made it possible for them to thrive, then screw'm.
Modernmystic
1 / 5 (3) May 19, 2011
On the nose...count me in...and most of the people I know as well.


Good deal just so we're clear, your emotional tenor on corporate America dictates whether or not you'll follow the law.

Of course, in China, this isn't criminal behavior, it's just business.



And if they were lining up people and shooting them? If this could be connected to hurting corporate America would this be acceptable too? Actually that's a rhetorical question since you've already basically admitted that's your worldview.
Shaffer
3 / 5 (2) May 19, 2011

And if they were lining up people and shooting them? If this could be connected to hurting corporate America would this be acceptable too? Actually that's a rhetorical question since you've already basically admitted that's your worldview.


Actually this is a conditional question...were they annoying people? You're the mystic, tell me what I would do...
emsquared
3.7 / 5 (3) May 19, 2011
Yeah, gotta agree with bloodyanarch. The notion 1.) that the pirating of these products, by people who would never have had that software available to them anyway, costs that company anything is patently false, 2.) that, even if a significant fraction of that piracy does actually represent lost profit, it translates directly into jobs on the other side is also patently false. This of course, being the problem with the "job creation" rhetoric that has posessed America. It's fundamentally dishonest.

Purveyors of intellectual property and software have chosen to demand unreasonable prices, punish legal purchasers by belaboring the software with completely useless anti-piracy measures and do nothing but cry instead of changing their business model, or instead of abiding by the principles of economics. I don't have much sympathy.
Modernmystic
1 / 5 (3) May 19, 2011
Actually this is a conditional question...were they annoying people? You're the mystic, tell me what I would do...


One doesn't have to be a mystic, you've already said that you advocate being a criminal because you're morally offended by corporate America. Your exact response was "on the nose". Nothing need be open to interpretation. Or did you wish to further clarify your position?
ereneon
not rated yet May 19, 2011
I'm mostly in agreement with emsquared.

Though the first point about the goods not being available to Chinese people without pirating is partially true, I suspect their total sales would go up (by how much I'm not sure) if all the piracy stopped. Why bother buying the good if you can get it free?

Agreed that more profits do not mean more jobs. Political job creation rhetoric is a misleading way to think of the economy. Why would companies hire more people if they suddenly made more money from China? Would there by any benefit to the company for it? In most cases, I think the answer is no.

Agreed about the foolish business model these companies are using. They are stuck in the last century and refuse to move on. If they offered goods in China for a price adjusted for purchasing power (instead of the US price which is insane by Chinese standards), then they would make a lot more money at almost no additional expense.
rwinners
5 / 5 (1) May 19, 2011
And if China revalued it currency, more millions of jobs might return to the US. Who's our friend, anyway???
unknownorgin
1 / 5 (1) May 20, 2011
Before the NAFTA agreement started the foriegn product dumping free for all most people had jobs and while not rich they could at least support themselves.
bloodyanarch
not rated yet May 20, 2011
No, Modernmystic I think all I was saying is that I dont believe that increased profits translate into more jobs. I don't support Piracy.

I will note that the Music industry has had a huge issue with piracy. It should be noted that although they have fought tooth and nail against any chage, the introduction of a reasonable download system has curtailed piracy (Itunes). Also the Movia media has noted similar effect with the introduction of Net flix.

What does this say? I think it say that if you provide something people want at a reasonable price they will pay for it. If you don't, they will steal it. And yes i do not that somepeople will almost never steal and some people will almost never pay despite a product being resonbly priced or not
paulthebassguy
5 / 5 (2) May 22, 2011
All of this is irrelevant.

How can they can claim that piracy costs this amount of jobs until they can prove that the people that obtain the pirated versions would have actually bought legitimate versions anyway?

If the pirated versions were unavailable, a lot of these people would have just gone without, so no money would be made in the first place.

Modernmystic
1 / 5 (1) May 23, 2011
No, Modernmystic I think all I was saying is that I dont believe that increased profits translate into more jobs. I don't support Piracy.


You could have fooled me by your wording, but fair enough. I agree with this much.

...the introduction of a reasonable download system has curtailed piracy (Itunes). Also the Movia media has noted similar effect with the introduction of Net flix.


Indeed, they're trying to hold on to a model akin to the printing press. Legal or not it's doomed to fail. This is no excuse for criminality.

What does this say? I think it say that if you provide something people want at a reasonable price they will pay for it. If you don't, they will steal it. And yes i do not that somepeople will almost never steal and some people will almost never pay despite a product being resonbly priced or not


It's not up to someone else to decide what's a reasonable price for the car you have for sale, and if they don't agree simply steal it.