VZCZCXRO8128
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1463/01 1530922
ZNR UUUUU ZZH
P 020922Z JUN 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 4248
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHIN/AIT TAIPEI 7276
RUEHKO/AMEMBASSY TOKYO 2622
RUEHUL/AMEMBASSY SEOUL 1254
RUEHMO/AMEMBASSY MOSCOW 9313
RUEHGV/USMISSION GENEVA 2481
RUEAHLC/DHS WASHDC
RUCPDOC/USDOC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMCSUU/FBI WASHINGTON DC

UNCLAS SECTION 01 OF 02 BEIJING 001463 
 
SENSITIVE 
SIPDIS 
 
State for EAP/CM - SFlatt, PPark 
State for EEB/IPE - RWatts, JUrban, TMcGowan 
State for EEB/CIP - SFlynn, FSaeed 
USTR for China Office - TStratford, TWineland, AWinter 
USTR for IPR Office - JRagland, SMcCoy 
Commerce for National Coordinator for IPR Enforcement 
Commerce for MAC NMelcher, JWu, ESzymanski 
Commerce for MAS RLayton, SMathews 
LOC/Copyright Office - STepp 
USPTO for International Affairs - LBoland, EWu, STong 
DOJ for CCIPS - MDubose and SChembtob 
FTC for Blumenthal 
FBI for LBryant 
DHS/ICE for IPR Center - DFaulconer, TRandazzo 
DHS/CBP for IPR Rights Branch - GMacray, PPizzeck 
ITC for LLevine, LSchlitt 
 
E.O. 12958: N/A 
TAGS: ETRD EIND KIPR ECON CH
 
SUBJECT: CHINA OBJECTS TO SPECIAL 301 DESIGNATION, WANTS MORE 
CARROT AND LESS STICK 
 
This cable is sensitive but unclassified and is not for Internet 
distribution. 
 
Ref A: State 41880 
 
¶1. (SBU) Summary: China objects to its designation as a Priority 
Watch List (PWL) country in the U.S. Trade Representative's (USTR) 
2009 Special 301 Report, Department of Treaty and Law Director 
General Li Ling of China's Ministry of Commerce told visiting USTR 
officials on May 27.  She said that China has "tried its utmost to 
improve IPR protection," and that while some problems remain, 
piracy levels have declined consistently in recent years.  The 
United States has its own IPR problems, she asserted, and too 
often uses a stick (e.g., the 301 Report) in international 
relations, instead of the carrot of cooperation.  USTR officials 
acknowledged that China has made progress on IPR, and repeatedly 
stressed USG interest in collaborating with China towards progress 
on IPR protection.  End Summary. 
 
¶2. (SBU) Assistant USTR Tim Stratford and USTR China Office Chief 
Counsel Claire Reade met on May 27 with Department of Treaty and 
Law Director General Li Ling at China's Ministry of Commerce to 
discuss the 2009 Special 301 Report's designation of China as a 
Priority Watch List country with Section 306 monitoring.  Per 
reftel instructions, Emboffs notified DG Li by fax of the contents 
of the 2009 Special 301 Report on April 30, at which time Li's 
ministry had no substantive reaction. 
 
¶3. (SBU) Stratford began and ended the discussion with assurances 
of USG interest in working together with China on IPR protection, 
and acknowledged his awareness that MOFCOM is very concerned with 
strengthening China's IPR environment.  Stratford also cited 
several specific rightholders' concerns in China, particularly in 
the area of Internet piracy.  He emphasized that USTR always seeks 
input from the Chinese government in preparing the report, and 
especially values reports of positive IPR developments in China. 
 
¶4. (SBU) Li responded that China objects to the designation of PWL 
in the 301 Report, and has "tried its utmost to improve IPR 
protection."  As examples, she noted the 2008 publication of 
China's National IPR Strategy and the publication in the past four 
consecutive years of China's IPR Action Plan.  No other developing 
countries, to her knowledge, undertake similar efforts, she said. 
Li also noted that a recent report (probably the Business Software 
Alliance's annual Global Software Piracy Study) showed piracy 
levels in China declining over the past several years.  While 
problems still exist, Li said, there has been progress. 
 
¶5. (SBU) Li asserted that "even the United States" has IPR 
problems, and that Internet piracy, especially, is a global issue. 
 
As an example, she cited her son, who she said is in the United 
States and downloads pirated music from U.S. websites.  She 
asserted that neither the U.S. nor the EU have found effective 
ways to deal with the problem.  Li said the United States too 
often uses a stick (i.e., the 301 Report) and not the carrot of 
cooperation in pursuing its international relations objectives. 
 
¶6. (SBU) Stratford thanked Li for her feedback and acknowledged 
the progress China has made in IPR protection.  He again stressed 
USG interest in cooperating with China on IPR issues, and noted 
the importance of the upcoming IPR Working Group under the Joint 
Commission on Commerce and Trade as one important opportunity for 
 
BEIJING 00001463  002 OF 002 
 
 
both countries to work together toward common goals. 
 
PICCUTA