Though restricted by tax policy, software development policy and old idea of planned economy, China has decided to strengthen the efforts in combating piracy.

Xu Chao, deputy head of Copyright Department of the State Copyright Bureau, said that China will go on carrying out the measures formulated before. For example, informants of underground disc production line will be rewarded 300,000 yuan. This is also suited to some local governments. Besides, new policies will be drawn out. For instance, the people’s court will punish the pirates in line with the Criminal Law and Civil Law. The administrative departments will also actively investigate and deal with pirating cases.

According to insiders, legal producers occupy only 10 percent of the CD market, while the other 90 percent are shared by pirating groups.

One important reason is the mechanism. According to a person in charge of the Sony CD Corp. China Branch, most CD companies of China possess only the right of production but not distribution. Before the distribution by a few companies with such right, many procedures have to go, which provides opportunities for piracy and difficulty in coordination.

On the other hand, people who do not buy pirated CDs or VCDs will be considered suckers. The Chinese have been accustomed to sales of such products in audio and video shops. All pirated groups have their own organization and system.

It costs no more than two yuan to pirate a piece of VCD. Also, the duplicators need not pay the 13 percent value added taxes, copyright royalty nor author’s fee. If the VCD sells at five yuan, the profit ratio is 250 percent. The profits for pirated software and games discs are even higher, which may equal that of arms and drug smuggling. However, the danger is much less. As Karl Marx once pointed out, 100 percent profit will lead to a reckless move, while 300 percent profit will make one trample on all laws.

Xu pointed out that software industry is the core and soul of the information industry. It is a strategic industry of China. If the Chinese market is occupied by pirated products, the national software industry has no other choice but to die. On the contrary, foreign software companies will find other market if they lose the one in China. So the victim will be China itself.

Most CD Company responsible persons think it a pity that the present Copyright Law protects only authors’ right over their works, but without details on piracy. So they urgently call for legislation in this field.

As to a large number of enterprises, institutions and individuals who use the pirated products, the state will try to educate them and let them realize that piracy is stealing and that purchasing pirated products is no different from disposal of stolen goods. The state will give three to five years to enterprises to desert all pirated software now in use. If any enterprise refuses to do so, punishment measures will be accordingly taken.

Now anti-piracy associations have been set up in more than 10 provinces and municipalities. Once they take a certain shape in culture developed areas, a national association will be organized, which will be responsible for attacking pirated books, audio and video products and software. The State Copyright Bureau will provide guidance and suggestions to the work.

Software producers also play a key role in stopping the piracy. At the end of last year, software companies distributed several dictionary and translation software at a price of only 28 yuan, much lower than the price of 168 yuan before. By the first half of 2000, an old-brand education software company of Beijing sells one of its products at only 10 yuan, cheaper than the pirated discs. The price reduction gave a big blow to piracy. Because of the sharp narrowing of the prices between pirated and legal software, the pirates will make no profit. Reports of Beijing showed that many pirated product seller in Zhongguancun had changed their job and gone into other trade.

Combating pirating industry does not mean to completely put an end to it. The current production line can be transferred and used in producing legal discs. If these enterprises can develop software independently, they can still make maximum profit. The improvement of such social environment needs effort from every citizen.

(CIIC)