The cost of Chinese piracy

According to the International Trade Commission the cost of Chinese intellectual property rights infringements (IPR) to the US economy amounted to USD 48.2 billion in 2009 or, to be more precise, somewhere between USD 14.2 and USD 90.5 billion… Such large variation is explained by the fact that many firms are unable to calculate the losses incurred. The ITC goes as far as computing the number of jobs (2.1 million) that could be created if China was to comply with its IP obligations.

The sectors most suffering from losses are information (USD 26.7 billion) and high-tech manufacturing (USD 18.5 billion) and the largest type of infringment is copyright (USD 23.7 billion). Surprisingly, consumer goods manufacturing is thought to suffer losses below the USD 1 billion mark. Another surprise comes from the fact that 40% of IP-intensive firms doing business in China do not report IPR infringments. Finally, it turns out that Guangdong, Shanghai and Beijing are both the best and worst locations for IPR protection (depending on which sector one looked at).

IPR infringments remind me to an extent of the drugs issue: it is all very well to look at the supply side but what about the demand side?