`Computer worms' undermine China piracy talks

The H W Electronic Corporation operates from a modest one-room office in a converted warehouse in Zhongguancun Street, Peking's "Electronics Street", an area which is home to most of the city's dian nao chong, or "computer worms".

The office is equipped with all that is necessary for its business: one desk, two chairs, and a desktop computer. The manager, who uses the name Mr Wan, is an obliging fellow: "Whatever software packages you need, I can get them for you at reasonable prices," he says, profering a printed list of what is available. It includes the newly developed "Chinese Star", a Chinese-language word-processing system; the authorised version retails for more than 2,000 yuan (£50), but Mr Wan's boxed set of discs and manuals can be purchased for 200 yuan. Bring your own floppy disc, and Mr Wan will make a copy of your chosen software for 15 yuan.

A few miles away, under the cloud of a looming trade war, United States and Chinese negotiators will today reopen talks over copyright protection in China. Piracy of software, films, CDs and audio-visual products will be top of the agenda. It is less than three weeks before the 4 February deadline when the US is threatening massive trade sanctions over copyright abuse, and China is promising equally strong retaliation.

This time the US negotiating team includes trade representatives from the industries thatfeel most injured: Jack Valenti, president of the Motion Picture Export Association of America; Jay Berman, president of the Recording Industry Association of America; and Robert Holleyman, president of the Business Software Alliance.

The grievances are many. A US trade official this week accused a state-owned company in Shenzhen of producing crates of laser discs of Walt Disney's The Lion King months before the hit movie was even released on videotape. Pirated CDs are on sale everywhere. The Business Software Alliance has alleged that 94 per cent of software used in China is copied. It is a booming market. Industry analysts estimate that more than 650,000 personal computers were sold in China in 1994.

Mr Holleyman should take a break to wander through the software companies and computer shops of Zhongguancun.Walls and posts are pasted with colourful advertisements from dozens of companies. In this area, hundreds of dian chongzi (shop worms) hang around distributing piles of handouts for the various shops. Sloppily dressed and unkempt, they are mostly rural migrant workers from inland provinces.

There are at least 40 software reproducing and copying outlets in this area of north-west Peking, most run by just three or four people. Mr Wan, a typical "computer worm", grew up in the north-east of China, attended a university in Peking where he studied computer science, and then set up his office in Zhongguancun.

With the countdown towards a possible trade war now underway, China is making a much-publicised, albeit somewhat belated, attempt at yet another crackdown on piracy.

On Monday, the government announced a clampdown on CD piracy during Chinese Lunar New Year, beginning on 31 January. It said a high-level team had been sent to the southern Guangdong province to gather evidence.

The US is unlikely to be impressed: it has already furnished the Chinese with a list of 29 factories in southern China, some state-owned, which it alleges produce 75 million pirated CDs a year.

But on intellectual property, China's pirate entrepreneurs are inclined to quote Kong Yiji, a character in one of Lu Xun's stories: "A scholar cannot be considered a thief when he tries to steal a book."