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China has arrested some 2,600 people in an 8-month-old crackdown on product piracy, the government has said, criticizing US complaints that it was failing to stop rampant copying of foreign movies, music and other goods. Authorities have destroyed 63 million compact discs and other counterfeit goods estimated to be worth 860 million yuan ($105 million), said Vice Minister of Commerce Zhang Zhigang, speaking at a nationally televised news conference. Zhang acknowledged that China still faced “quite a few problems,” but he criticized the U.S. for adding Beijing to a list of 14 countries that receive special scrutiny because of widespread violation of copyrights. The US government said in April that product piracy in China had reached “epidemic levels” and has warned that Beijing could face formal complaints in the World Trade Organization, raising the threat of trade sanctions. China is regarded as the world’s biggest source of illegally copied goods, including Hollywood movies, Microsoft Corp. software, Ralph Lauren shirts and Callaway golf clubs. Estimates of potential lost sales to legitimate producers worldwide range from $16 billion to as much as $50 billion a year. Despite repeated crackdowns, counterfeit goods are widely available in Chinese shops. Authorities have brought 600 criminal cases against product pirates since the crackdown began in August and have won convictions in 99.9% of cases, said Shen Deyong, the deputy chief judge of China’s supreme court, who appeared at the news conference with Zhang. Zhang said that 41 local officials had been punished for helping pirates, and that Chinese authorities had dismantled 24 illegal compact disc factories – a key demand of US officials.

See: http://money.cnn.com/2005/08/02/news/international/china_congress.reut/ and http://www.usatoday.com/tech/columnist/kevinmaney/2005-05-03-music-piracy-china_x.htm