US Companies Lose $48 Billion in 2009 From Chinese Piracy

Widespread piracy and counterfeiting of American software and other intellectual property in China cost U.S. companies an estimated $48 billion in 2009, according to a U.S. International Trade Commission report released on Wednesday.

The information and service sector lost more than $26 billion, while the high-tech and heavy manufacturing sector lost more than $18 billion, among other sectors.

“Despite broad success in the China market, many U.S. companies have reported that two major factors—the infringement of their intellectual property rights in China and China’s indigenous innovation policies—have undermined their competitive positions,” the report said.

The report, requested last year by the Senate Finance Committee, concluded that many U.S. firms had losses in sales, profits, and license and royalty fees. They also suffered damage to brand names and product reputation associated with infringement of intellectual property rights in China.

The commission estimates that 2.1 million jobs could have been created in the United States had China complied with its current international obligations to protect and enforce intellectual property rights.

“China’s unfair practices cost the U.S. billions of dollars and millions of jobs,” Senate Finance Committee Chairman Max Baucus (D-Mont.) said in a press release. “Time and time again, China has failed to protect and enforce American intellectual property rights, and it continues to discriminate unfairly against American businesses.”

Meanwhile, Baucus headed to his home state of Montana for the annual Asia-Pacific Economic Cooperation meetings in Big Sky, Mont., on Wednesday. Baucus is looking to help create more American jobs and increase exports to China and other Asia-Pacific countries.