updated 6/28/2005 9:04:01 AM ET 2005-06-28T13:04:01

China has arrested some 2,600 people in an eight-month-old crackdown on product piracy, the government said Tuesday, criticizing U.S. complaints that it is 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 Commerce Minister Zhang Zhigang, speaking at a nationally televised news conference.

Zhang acknowledged that China still faces "quite a few problems," but he criticized the United States for adding Beijing to a list of 14 countries that receive special scrutiny due to widespread violation of copyrights and other intellectual property rights.

"China has made great efforts to promote IPR protection," Zhang said. "Under such circumstances, to accuse China of misconduct or lack of protection of IPR is unreasonable."

The U.S. 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 ranging from Hollywood movies and Microsoft Corp. software to Ralph Lauren designer shirts and Callaway golf clubs. (MSNBC is Microsoft-NBC joint venture.)

Estimates of potential lost sales to legitimate producers worldwide range from $16 billion to as much as $50 billion a year. China's own producers of music, software and other goods say they also suffer huge losses.

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 percent of cases, said Shen Deyong, the deputy chief judge of China's supreme court, who appeared at the news conference with Zhang.

Shen didn't say how many people were convicted or what penalties they received.

But China has begun imposing jail time for violations after its trading partners complained that earlier penalties limited only to fines were too light to deter pirates.

"China is among the countries that are meting out the most severe punishment for IPR crimes," Shen said.

Zhang said 41 local officials also were punished for helping product pirates, and that Chinese authorities have dismantled 24 illegal compact disc factories _ a key demand of U.S. officials, who complained that seizing pirated discs made little sense if the factories that made them were still operating.

The crackdown was due to end in August, but Beijing now plans to extend it through the end of the year, Zhang said.

"We'll be looking for a solution to address the root cause of the IPR problem, and have increased our public education efforts," he said. "But still there are quite a few problems."

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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