China remained on the United States Trade Representative's (USTR) Priority Watch List following the agency's release of its "2012 Special 301 Report" on April 30. The list included 13 other countries, including India and Canada.

In response to the list, a spokesman for China's Ministry of Commerce (MOFCOM) expressed regret over the list, and voiced hopes that in future the U.S. would make a fairer, more comprehensive and more objective evaluation of China's efforts regarding IPR protection.

The "special 301 report" is USTR's annual review of the global state of the protection of, and enforcement of laws relating to intellectual property rights (IPR) protection. Every year the report identifies an annual "Priority Watch List", a "Watch List" and a "Section 306 Monitoring" List, containing countries whose intellectual property regulations are thought to be cause for concern.

The lists are also used by the U.S. government as a frame of reference for trade protection or to decide the appropriate response to countries that are adjudged to provide inadequate levels of IPR protection and enforcement.

China has now spent a number of consecutive years on the "Priority Watch List" and there have of late been an increasing number of lawsuits filed against China's IPR by the U.S.

In one of the most recent cases, U.S. clean energy company AMSC sued Chinese wind turbine maker Sinovel over alleged intellectual property theft. The case is, to date, the largest IPR lawsuit between China and U.S.

The ongoing 4th round of the China-US Strategic and Economic Dialogue also focuses on the IPR issue. The talks mark a change with the past as more Chinese entrepreneurs have become aware of the importance of IPR. As a result, the IPR issue is no simply an issue of concern for the U.S. Both sides now attach equal importance to the subject of IPR.

According to statistics, ZTE and Huawei, two Chinese telecommunication equipment and network solutions providers, ranked No.1 and No.3 respectively in the world in 2011 in terms of patent applications.

Vice Minister of Commerce and deputy China International Trade Representative Chong Quan, said during the latest China Import and Export Fair (Canton Fair), that IPR protection was part of China's national strategy. China's number of patent applications ranked 2nd in the world in 2010, with trade mark registrations ranking 1st.

Chong Quan also expressed his concerns regarding China's IPR protection. He commented that with the development of international trade, products which infringe IPR regulations will be an international problem as such trade influences the whole industry chain covering production, imports and exports, sales and consumption.

However, with the development and proliferation of the Internet, Internet infringement and piracy have become increasingly problematic, requiring that China's administrative law-enforcement department adopt more effective enforcement and monitoring measures.

Chong Quan also stated that with increasing global economic integration, developed countries should help developing countries in dealing with the challenges posed by IPR protection, rather adopting a critical and punitive approach.