Piracy of intellectual assets has been one of the biggest dissensions in the field of commercial trading between the United States and China. Many U.S. products, especially those of patented intellectual properties, get pirated in China, which have led to great losses for American merchants. Although the United States government frequently condemns China on this issue, the government of China does not give any apologies. Whenever facing this kind of criticism, the Chinese government usually responds in the following way: “If you say I am not good, I will just say that you are not good either.” It uses this against criticism of China’s human rights issues from the United States, as well as when the U.S. Department of Defense published the report on China’s military situation. Below is an article from Globe, a magazine under the Xinhua News Agency. The article points out that, “as the biggest producer and exporter for audio and video products, the United States is facing even greater challenges from copyright infringement than any other country.” 
The Institute for Policy Innovation of the United States published a report recently. According to the report, “each year, copyright piracy from motion pictures, sound recordings, business and entertainment software and video games costs the U.S. economy $58.0 billion in total output, costs American workers 373,375 jobs and $16.3 billion in earnings, and costs federal, state, and local governments $2.6 billion in tax revenue … The study found, among other things, that these IP (intellectual property) industries are the most important growth drivers in the U.S. economy, contributing nearly 40 percent of the growth achieved by all U.S. private industry and nearly 60 percent of the growth of U.S. exportable products.” 
As the biggest producer and exporter for audio and video products, the United States is facing even greater challenges from copyright infringement than any other country.
The Pirate Party of the United States Founded
A reporter of Globe recently had a phone interview with Seth Oster, the spokesman of the Motion Picture Association of America (MPAA). He was participating in an anti-piracy event hosted by the MPAA. Oster said that the U.S. movie market occupies more than one third of the world movie market; due to great impact of piracy on the movie market and the fact that the United States has the biggest consumer market for family entertainment, one indeed can say that the United States suffers the most from copyright piracy.
For all the markets where piracy plays a role, the markets of motion pictures and sound recordings have the worst situations. In 2005, the MPAA, an association composed of six big movie producers of Hollywood, did a large-scale investigation. It showed that the U.S. movie market had lost $6.1 billion dollars to global piracy [in 2005]. Among this, $3.8 billion came from pirated CDs and DVDs, and $2.3 billion came from illegal transmissions and downloads on the Internet.
In terms of geographic locations, the loss of $1.3 billion happened in the United States, which is higher than the $1.2 billion of the Asia-Pacific region, which was considered the catastrophe region by Hollywood.
In the past several years, the severe piracy activities in the United States have forced the MPAA to ally with law-enforcement branches and strengthen cracking down on piracy.
Oster told the reporter that although the U.S. laws strictly protect intellectual property and the law-enforcement branches spare no efforts in cracking down on piracy activities, as an “investment” that has low cost and fast profits, piracy still attracts many people who are willing to take the risk. Oster said that the development of consumer electronics and disc duplication technology have lowered the technical barrier by a lot. According to estimates, a pirate needs only about $1000 to make a mother disc for a movie and then can duplicate on a large scale. Recently in major cities, there have also been criminal gangs and organizations involved in production and circulation processes, especially some minority groups that have close relationships with international markets. Some criminal organizations even use the profits gained from selling pirated CDs in the drug market, firearms trading, human trafficking, and other criminal activities.
There was something interesting that was related to this. The Pirate Party of the United States has recently formally declared to be founded. This is the first political party in United States that has the political aim of opposing copyrights. After its establishment, it immediately accused a number of media organizations, including the MPAA, of limiting technology development and restraining individual citizens’ freedom.
“They put strict limitations on common Americans, utilize fake files to attack P2P sharing networks, and use political tools to modify the laws and make political bribes.”— From the Pirate Party’s proclamation.
Black Chains on the Streets
In big cities such as Los Angeles and New York, the degree of severity of selling pirated DVDs is no less than in any Asian cities. It is especially bad in places where concentrated minorities reside, because these are the dead spots for law enforcement by police.
A pirated DVD of a new movie costs $5 on the street. It is even lower than a ticket for the movie theater. It is much cheaper than the genuine version that comes out 2 months later, which costs about $20. Even in a medium size city such as Washington, D.C., there are also a number of fixed spots that sell pirated DVDs.
What U.S. officials hate the most are underground black markets, but there is not much they can do. In these black markets, the main and popular items are those counterfeit items of famous brands and pirated digital audio and video products. Most mimicries of famous brand products, such as Louis Vuitton purses, a famous French brand, come from New York markets and then flow into third-world countries. Pirated DVDs are usually duplicated in underground shelters with large-scale duplication equipment.
New York City and Los Angeles can be recognized as headquarters of black markets for counterfeit items. Along the roads near Hollywood, there are vendors all around. They put the goods over rugs on the ground, and there are thousands of tourists from around the world attracted to these places.
An insider told the reporter that according to what he has found out, there is a very big underground factory in Los Angeles for making pirated products. The boss of the factory is extremely powerful; he can obtain the mother disc simultaneously as a new movie is played the first time in the theaters, and within one night, tens of thousands of DVDs will be transported to other cities and even other countries.
The reporter of Globe also got to know from the MPAA that due to the improved protection schemes for preventing piracy, right now the main method for obtaining the source of the new movies is using hand-held video cameras to directly record the movies that are playing for the first time in the theaters. This method does not produce perfect quality DVDs, but it is very common today on the U.S. black market. In order to avoid strict security measures in the theaters in major cities, the pirate organizations even send people to small towns to record new movies. Oster, the spokesman of the MPAA, said that in the past year, there are people all over the United States that were arrested for secretly recording movies using video cameras.
According to U.S. laws, infringing copyrights is a federal felony. However, since September 11, the law-enforcement branches, such as the FBI, have been putting their main focus on anti-terrorism. Therefore, to some degree the strength against piracy has declined. This is thought to be the reason for the overflow of pirated products.
However, in 2005, some law-enforcement personnel creatively attempted to relate piracy and terrorism. For instance, a police officer in Los Angeles who is responsible for investigations of intellectual property said in Congress while he was testifying that some members from terrorist organizations have likely been involved in piracy activities. This has caught the attention of the congressional representatives concerning the increasing severity of piracy.
As the piracy situation is getting worse and worse in the United States, the MPAA and the RIAA (Recording Industry Association of America), who have been focusing a lot more on anti-piracy internationally, are forced to put more attention on the United States. Currently, events for raising awareness on copyright issues have been widely launched to consumers. The consumers are informed that if one buys a pirated product, it is supporting criminal organizations and being a part of them.
Around Christmas and New Year of 2007, the MPAA and the RIAA started a campaign against pirated movie DVDs and music CDs. The campaign was all across America, including Los Angeles, New York, Atlanta, Dallas, Chicago, New Orleans, and other major cities. The two associations not only sent representatives to help police to trace the source and destination of the pirated audio and video products, but also to call for staying away from pirated products, thus attempting to drive the illegal pirates out of the markets.
However, as Internet usage becomes more and more common, illegal downloads on the Internet are gradually replacing illegal duplication of movie DVDs and music CDs, and becoming the major form of piracy. Due to the private and anonymous character of the Internet, Hollywood will be facing an even greater challenge from pirates.
 Globe Magazine Issue 6, March 15, 2008.
 This report can be accessed in the following link:
 Translator and copyeditor could not find this quote in the Pirate Party’s declaration.