Short Takes

Intellectual Property Rights

Enter-
tainment-
Base of China (5fad) is suing Baidu.com, Inc., the parent company of China's top Internet search engine, for providing illegal links to more than 1,000 copyrighted songs through its website. Compensation claims total ¥100 million ($13.2 million), making this the largest copyright case in China, according to a 5fad press release.

E.I. duPont de Nemours and Co. settled a case against Nanjing-based Trustchem Co., Ltd. for selling agricultural products that contain rimsulfuron, a DuPont herbicide that is patent-protected in China. Trustchem will issue a formal apology to DuPont for its losses and pay an undisclosed amount of monetary compensation.

Economy

China's economy grew at the fastest rate in 12 years, expanding 11.9 percent in the second quarter. Meanwhile, July inflation hit 5.6 percent, mainly because of a jump in food prices. The value of the renminbi rose to a high of 7.56 against the dollar in late July. China's trade surplus hit a record $112.5 billion in the first half of 2007, up 84 percent from the first half of 2006. In response, some US lawmakers pushed harder for currency reform and introduced bills that would limit Chinese imports. Beijing also reacted by cutting value-added tax rebates on exports and placing restrictions on processing trade.

US-China Relations

In preparation for the upcoming Joint Commission on Commerce and Trade (JCCT) and Strategic Economic Dialogue (SED) meetings in December, US Treasury Secretary Henry Paulson visited China for the fourth time since assuming his post. Paulson met President Hu Jintao, Vice Premier Wu Yi, and other top PRC officials. The third session of the SED will focus on currency, product safety, energy, and the environment. In addition, this October's US-China Joint Economic Commission meeting in Washington, DC, will cover global imbalances, currency and financial sector reforms, and open investment policies.

Product Safety

Both China and the United States have created new bodies to coordinate efforts on product and food safety. The Bush administration established the US Import Safety Working Group, while the PRC State Council formed a leading group on food and product safety. According to a new regulation, PRC officials will be allowed to conduct onsite examinations of manufacturing and sales facilities; consult, copy, and suspend trade-related contracts; confiscate illegal products; and suspend manufacturing and sales facilities that potentially threaten lives.

Over the last few months, US companies have recalled several products imported from China—from lead-tainted toys and toothpastes that contain diethylene glycol to poisonous pet food and substandard tires. Two-thirds of respondents in an NBC/Wall Street Journal poll have little or no confidence in Chinese food products. The American Importers Association notes that liability insurance will be critical for Chinese products exported to the United States.

Environment

The PRC State Environ-
mental Protection Administration (SEPA), People's Bank of China, and China Banking Regulatory Commission are urging commercial banks to use environmental compliance as a key factor in pre-loan risk assessments. This move is meant to provide enterprises with economic incentives to obey environmental rules. SEPA has already listed 30 domestic firms that have violated environmental standards.

The Organization for Economic Cooperation and Development (OECD) released an environmental performance review of China in July. The report makes 51 recommendations under three broad categories: closing the gap between implementation and policy, improving integration with economic policies, and reinforcing support for international environmental cooperation. According to OECD, China has accepted these recommendations and plans to implement them.