EXECUTIVE SUMMARY China's government has pledged to crack down copyright piracy by implementation of anti-piracy and anti-counterfeiting laws and regulations; it faces increasing pressure to show progress. The periodic crackdowns against counterfeiting have been launched but they often seem motivated more by politically appeasing the United States and other countries than a sincere effort to combat the problem. The United States and other countries want China to impose harsher penalties on crimes linked with counterfeit goods. Chinese law protects trademarks and prohibits companies from copying the “look and feel” of other companies' stores. The Chinese government enforced laws against copyrights piracy in 2006; there were criminal penalties on producing or selling counterfeit goods if the total value of the confiscated products was less than a certain amount. The penalty for importing pirated discs is up to four years in prison and a fine of $1,290 for each imported disc. The Chinese government warns violators in large markets in Shanghai and Beijing of these penalties. However, some doubt that much will change until China graduates from manufacturing goods to designing them. New opinions on handling criminal copyright infringement cases contain helpful provisions which could foster an effective criminal remedy against online piracy activities. The International Intellectual Property Alliance (IIPA) commends the efforts of the U.S. Government to secure these important commitments. However, as has been the case with past commitments to improve copyright protection and market access made by the Chinese Government, “it remains to be seen whether the Chinese will implement them in a sustainable and meaningful way, at the central and provincial levels, to ensure that copyright piracy in all its forms is curbed and to provide a fairer and more open market for U.S.