China tackles black market for fake goods

The Chinese authorities are stepping up their war on the country's thriving black market for counterfeit goods with a new crackdown in which more than 3,000 people arrested.

Among the goods seized were 26,000 mobile phones, some with fake Nokia and Apple labels, copies of Louis Vuitton bags and Rolex watches, car parts, DVDs and clothes. The police have shut 292 websites selling counterfeit goods.

Increasingly, stamping out piracy is becoming linked to efforts to transform China from a low-cost manufacturing base into a country with companies higher up the value chain, such as software firms.

"Intellectual property protection is essential for building an innovation-oriented country and achieving a shift from 'China manufactured' to 'China innovated'," Li Chenggang, deputy director of the Commerce Ministry's law department, told a news conference.

Facing mounting criticism from the European Union and the United Sates over the theft of intellectual property rights (IPR), China started an anti-piracy campaign in October last year and promised that it will stamp out the counterfeiters.

It's not just pressure from overseas, as China's fledgling software, music and would-be innovators have been devastated by unlicensed copying. Some trade groups say illegal copying of music, designer clothing and other goods costs legitimate producers billions of pounds a year in lost potential sales.

Last year the Organisation for Economic Co-operation and Development warned in a report that intellectual property infringements "remained a problem" in China.