The US Government should not exaggerate the intellectual property rights (IPR) issue in trade relations with China, Chinese trade researchers said on Friday.

The remarks came at the time that James Mendenhall, general counsel of the Office of the US Trade Representative, threatened to file a complaint with the World Trade Organization (WTO) if China could not "dramatically reduce" IPR violations.

"If we were to conclude that the dispute settlement is the best solution in dealing with China, we will not shy away from that," he said during a visit to Beijing.

The United States complained that its trade deficit against China largely resulted from piracy and counterfeiting in China, saying the deficit had increased to US$202 billion last year.

China has been intensifying its fight against piracy, which has harmed not only foreign but also domestic companies, said Zhao Yumin, an analyst from the Ministry of Commerce's trade and economic co-operation institute.

"Central and local governments at various levels have recognized the importance of IPR protection," she said. "But it takes time for China, a developing country, to develop a mature IPR protection system."

IPR protection tops the agenda of the ministry as it plans to establish offices across the country to accept complaints of piracy.

In fact, Zhao said, the US exaggeration of IPR issues came from its fear of China's surging exports, particularly exports of middle- and high-end high-tech products.

Mendenhall said that in his three-day visit to Beijing, he exchanged information with Chinese officials over IPR protection and other trade issues, such as China's regulation of imported foreign car parts.

A rule took effect in China last year requiring higher, full-vehicle tariff rates on imported car parts or components. It increased some carmakers' production costs in China.

Mendenhall's visit is expected to pave the way for the Joint Commission on Commerce and Trade, which is scheduled to take place in April in Washington.

The dialogue generally focuses on a number of issues, including IPR protection and trade conflicts. The highest-level trade officials from both sides attend the commission.

(China Daily March 4, 2006)