Piracy: A page hard to turn for regulators
By Xie Ye (Business Weekly)
Updated: 2005-05-23 13:46

Zhao Huilian, a stout, reddish-cheeked woman, stands by her tricycle on Beijing's bustling Huixindong Street. She is aggressively trying to hawk the dozens of best-selling novels, biographies and historical and economic books on her cart.

Some books look nice; some, not so nice. But, without doubt, they are all pirated.

Zhao's husband, Zhang Wenguang, is a few feet away. He is leaning on a bicycle, watching vigilantly for police, who could arrive at any time to put the boots to the vendors.

Hawkers of pirated books do the business in their way. [cartoon by Zhang Yaoning/China Daily]

In the worst-case scenario, the hawkers would be arrested either fined or detained and charged and their goods would be confiscated.

Zhao and Zhang take pride in the fact they offer their customers hefty discounts on the best-sellers. For example, they sell the pirated version of "My Life," former US President Bill Clinton's memoirs, for 18 yuan (US$2.20), more than 60-per-cent off the cover price. The biography of former Chinese President Jiang Zemin is 10 yuan (US$1.20), compared with the publisher's price of 38 yuan (US$4.60).

You can even find a pirated Chinese edition of the latest in the Harry Potter series, even though the original English edition will not be published until September.

Passers-by occasionally stop and browse. But Zhao and Zhang fail to make a deal during a 30-minute stretch.

"The business is volatile," says Zhang. "Sometimes, you cannot sell a single book in a whole day."

Yet, the couple, and thousands like them, remain the biggest threat to China's book-publishing industry, which generates more than 45 billion yuan (US$5.4 billion) in revenues every year.

In big cities in China, pirated books are everywhere from shabby tricycles along bustling streets to small, gloomy book stores. Vendors hawk the latest in pulp fiction, biographies, ancient emperors even middle school textbooks.

It appears to be easy to commit "intellectual property theft." Publishers that pirate books stroll around the big State-owned Xinhua bookstores and buy the best-sellers.

Then, they photocopy and print in bulk in dingy underground publishing workshops in nearby villages. Once printed, they distribute the books to local wholesalers.

Book piracy is most rampant in Beijing, and Jiangsu, Henan and Guangdong provinces.

Sometimes, it can be tricky when it comes to "piracy." Legal publishing houses sometimes produce "pirates" by publishing more copies than they claim on the back covers of the books. Why? They are trying to evade taxes and royalties.

No one can tell exactly how many pirated books are in the market, or how many of the 75,000 private book shops in China sell pirated books.

But Lu Ye, deputy director of the Beijing Book Distribution Research Institute, has a guesstimate: More than 50 per cent.

Lu suggests pirated books make up half of the titles that have more than 200,000 copies in print. (A best-seller generally has more than 100,000 copies in circulation.)

Of the titles with more than 500,000 copies in circulation, four out of five copies are pirated, Lu suggests.

"The 'pirates' are at their peak," says Lu. "If it is not controlled, the legal publishers will be edged out by the 'pirates.'"

Publishers say piracy is rampant because the business is extremely lucrative.

A book that sells for 20 yuan (US$2.40) costs about 1 yuan (12 US cents) to copy.

Vendors such as Zhang can purchase a copy for 5 yuan (60 US cents), which allows them to cut at least 50 per cent off the cover price.

Nowadays, State-monopolized school textbooks are being pirated. That business can be even more profitable.

"Piracy is very lucrative. It is quick money, and all in cash," says Lu.

Now that pirated books, thanks to improved technology, are as neat as the genuine copies, the demand is high.

Government officials say they have never let up in the fight against piracy.

Major crackdowns are launched each year, generally between July and September, and police conduct regular daily inspections.

In the past two years, the Chinese Government has confiscated more than 43 million copies of pirated books, and nearly 3.6 million pirated periodicals.

"We have always maintained a firm position against piracy," says Duan Yuping, an official with the National Copyright Administration's information department.

"But it is not easy to fight against piracy, which is a global headache."

Market observers suggest it is difficult for the government to clamp down on piracy, as the illegal publishers work in small groups, produce in small quantities and keep moving their operations.

Publishers of pirated books also suspend production when they anticipate a clamp down.

Zhao Wei, manager of the royalties department of Yilin Press House, says her company and government officials occasionally trace book piracy to villages. But the publishers are usually a step or two ahead.

"Sometimes, our personal security is at risk when we go to those villages," Zhao says.

Like many industries in China, observers suggest, China's regulations against piracy are sound, and in place, but implementation remains the biggest problem.

"The anti-piracy mechanism is still under the creaky planned-economy, which makes the crackdown inefficient," Lu suggests.

For one thing, the anti-piracy campaign is being led by administrative institutions, including the State Intellectual Property Office, and cultural and propaganda organizations, rather than the police.

The institutions are not well staffed, and they do not have the technology needed to trace the piracy, Lu says.

Even though China's legislation provides for harsh penalties up to seven years in jail for those convicted of piracy, the punishments imposed tend to be flexible, and always subjective.

The administrative institutions have much latitude when deciding how to punish "pirates." That opens the door to corruption.

"In other countries, if you get caught, you are dead," says Lu. "In China, most of the cases end up involving fines, and the people are free to do it again."

Market observers suggest the prices of legitimate books are too high, which prompts people to buy pirated books.

In any event, piracy is threatening China's 500-plus publishing houses.

Market observers estimate publishing houses lose 200-300 million yuan (US$24-36 million) to piracy every year.

Zhao Wei says her company has sold 200,000 copies of "My Life." Sales, she estimates, would be double if not for piracy.

She says there could be as many as 300,000 pirated copies of "My Life" on the streets.

Last year, Yilin offered a 200,000-yuan (US$24,000) reward for information leading to the arrest of the publisher, or publishers, of the pirated copies of "My Life." The publishing house has not received any clues.

Back on Huixindong Street, Zhang and his wife have no concept of the trouble they are causing others. But they do know how much trouble the government's anti-piracy moves are causing them.

Zhang says he was caught twice in one month. He was fined 600 yuan (US$72) in total.

"I know the business is dangerous, but it is better than making ends meet on a farm," he says.

Zhang and his wife were farmers in Henan Province before they moved to Beijing a month ago.

When lucky, Zhang and his wife can sell 20 books a day. That is enough to support their family two children in Henan.

"I like Beijing, and I want to stay here," Zhang says. "If I do not sell books, I don't know how I can make a living."

Zhang stops talking. He glances up and down the street, as if the police are about to swoop in and surround the hawkers.

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