China Took Talks to Brink Before Bending

Even in the long history of protracted U.S.-China negotiations on issues ranging from diplomatic recognition to human rights, Sunday’s agreement on copyright piracy was a cliffhanger.

The negotiations aimed at curbing Chinese infringement of U.S. copyrights, patents and trademarks took place in nine rounds over a two-year period. They survived two deadlines set by the United States and the threat of trade sanctions by both sides affecting more than $2 billion in products.

At one point in December, Chinese officials accused U.S. trade negotiator Lee Sands of walking out on a meeting “without even saying goodby.” The official China Daily newspaper called Sands a “bogyman” intent on sabotaging the talks to deny China a place in the World Trade Organization.

Two weeks ago, U.S. officials informed China that no agreement would be possible unless the Chinese closed the Shenfei Laser & Optical System Co. in Shenzhen, a southern manufacturing city near Hong Kong. The Shenfei plant was notorious for mass-producing high-quality bootleg compact discs and laser videodiscs pirated from U.S. products.

The tension mounted as the Chinese appeared to ignore the U.S. demand. Finally, after 1 a.m. Sunday, hours before the deadline set by the Clinton Administration for the imposition of trade sanctions, the Chinese acted.

“Investigations have found that the Shenfei plant made illegal videodiscs of ‘Jurassic Park’ and other laser products,” the New China News Agency reported, repeating what U.S. officials and industry representatives had been saying for months as though it were a sudden, independent discovery by the Chinese.

As U.S. and Chinese officials continued to negotiate in the early morning hours at the Chinese Ministry of Foreign Trade and Economic Cooperation complex in central Beijing, troops from the People’s Liberation Army raided the Shenzhen plant.

The raid was unusual because the People’s Liberation Army also owns part of the Shenfei company. According to a senior U.S. official involved in the talks, it was not the only time that one part of the Chinese system found itself at odds with another of its own branches.

“If the army was not going to raid the plant, who would?” the U.S. official said. “The Chinese had to make some very hard decisions. There were several cases of different parts of the government working against each other.”