China rejects Washington IPR report

China expressed "deep regret" Thursday over a recent report from the US which lists China as a "priority watch country" for intellectual property rights (IPR) violations. China's foreign ministry, as well as its ministry of commerce (MOFCOM) pointed out in response that the Chinese government has made substantial progress in IPR legislation and enforcement.

The annual Special 301 Report, published by the Office of the United States Trade Representative (USTR) Wednesday, claimed China's grave IPR violations were worsened by its rising cyber theft, and has listed China as a major country for nine consecutive years in terms of IPR violations. Experts say the report shows the US' political distrust toward China, and say its accusations will bring harm to Sino-US economic and trade ties.

Commenting on the USTR report, Foreign Ministry spokesperson Hua Chunying said at a press conference Thursday that cyber security is a worldwide problem and criticism cannot help resolve the problem. MOFCOM said in a statement Thursday that "we've noticed that the USTR has recognized the positive effort and progress China has made in IPR protection recently but we're deeply sorry that it has classified China as a priority watch country for the past nine years."

"The theft of trade secrets is an escalating concern. Not only are repeated thefts occurring inside China, but also outside of China for the benefit of Chinese entities," the USTR said in the report, which analyzes countries with serious IPR protection problems.

The report claimed that particular concern came from public reports by independent security firms stating that actors affiliated with the Chinese military and government have been engaging in sophisticated cyber theft to steal data including IP from a significant number of US companies.

"The United States urges China to continue to give due consideration to concerns expressed by the US government as well as by private sector stakeholders as these revisions proceed through the system," it said.

"The US' charge of Chinese cyber theft and its corresponding actions such as barring US government agencies from buying Chinese information technology products will bring economic losses to Chinese companies including Huawei and ZTE," He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times Thursday.

"Politically, it showed the US' strategic distrust of China is deeply rooted despite all of the rhetoric claiming to value the China-US partnership."

On March 26, the US passed a spending bill which banned the US Commerce and Justice departments, space agency NASA and the National Science Foundation from buying IT products from firms thought to be "owned, operated or subsidized" by China due to concerns over cyber attacks that the US said it had traced to China.

"The US is abusing the term 'national security' by accusing Chinese companies of engaging in cyber theft, harming the economic and trade ties between the two nations," He Weiwen said.

"Such accusations by the US are unfounded, irresponsible and create a very bad atmosphere for Sino-US trade relations," said Zhou Shijian, a senior researcher with Center for US-China Relations at Tsinghua University.

"In terms of cyber attacks, China is also a victim. If the US believes cyber thefts originated from China, it should publish evidence so the Chinese government can punish those who initiated them," Zhou said.

The Chinese government has denied China's involvement in cyber espionage and expressed their strong opposition to the US bill in late March.

The USTR report did not suggest the US government take action such as sanctioning Chinese products.

But Reuters reported Wednesday that sanctions on Chinese goods remains an option as does the possibility of bringing the case to the World Trade Organization (WTO), citing an anonymous senior US trade official.

Along with China, nine other countries including Chile, India and Russia were also on the list of priority watch countries in the USTR report.