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Chinese IPR Enforcement Could Lead to 2 Million U.S. Jobs
May 19, 2011
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The U.S. International Trade Commission (USITC) estimates that, if China were to enforce intellectual property rights (IPR) protections, it could lead to as many as 2.1 million more jobs in the United States. A recent survey of IP-intensive firms revealed that IPR infringement in China cost companies in that segment of the economy approximately $48 billion in 2009. These firms said that - if China's were to enforce IPR protection at levels comparable to the United States - it would likely increase employment in their U.S. operations by approximately 923,000 jobs.

China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy reports on the results of a USITC survey in which many U.S. companies claim that IPR infringement in China results in:
• lost sales
• lost profits
• lost license and royalty fees
• damaged brand names
• damaged product reputation

U.S. firms also reported losses associated with China's indigenous innovation policies but were more concerned about the future implications of these evolving policies.

The USITC is an independent, nonpartisan, factfinding federal agency. It conducted the studies at the request of the U.S. Senate Committee on Finance.

Based on survey information, the USITC estimates that U.S. IP-intensive firms' losses from IPR infringement in China were approximately $48 billion in 2009.

These same firms said that if China's were to enforce IPR protection at levels comparable to the United States it would likely increase employment in their U.S. operations by approximately 923,000 jobs.

The survey went to more than 5000 U.S. firms in IP-intensive segments of the U.S. economy, and are those most likely to be affected by IPR infringement in China.

Firms in this segment alone spent $4.8 billion in 2009 to address possible Chinese IPR infringement in 2009.

The USITC used a statistical and simulation analysis to estimate the U.S. economic effects of an improvement in China's IPR protection to levels comparable to the United States'. This analysis found the following effects:
• a $21.4 billion increase in U.S. exports of goods and services
• an $87.8 billion increase in sales to U.S. majority-owned affiliates in China
• a potential 2.1 million increase in net U.S. employment under conditions of prolonged and high unemployment
• some reallocations within the U.S. workforce towards more IP-intensive services sector jobs

Respondents to the USITC survey also expressed concerns about China's indigenous innovation policies, especially:
• preferential support for Chinese firms in the form of tax incentives, subsidies, and preferential lending
• China-specific technical standards

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