The 12th five-year plan will be a watershed in the direction of China's development. It is expected to emphasise the upgrading of the economy to move output up the value chain. This will stimulate greater domestic consumption and reduce reliance on exports of cheap manufactured goods, which in turn could help address global trade and financial imbalances. A key component of the new plan will be innovation and the commercialisation of research and technological advances. As a result, China will have to take a step that it has so far resisted - a principled position in practice on an issue that it has largely treated as someone else's problem - intellectual property rights.
So far the mainland has been part of the problem. At street level rampant piracy has become a significant economic activity and job creator. The authorities' response to complaints from abroad about infringement of copyright and IPR has often amounted to little more than window dressing, such as crackdowns ahead of a US presidential visit on people selling fake foreign goods. The traders returned to the streets almost as soon as visiting officials and media had moved on.
Now, in its own interests, it must seriously consider doing whatever it takes to become part of the solution. Leaving aside the legalities and business ethics, slavish imitation of other people's intellectual property, in reality rampant theft and 'cut and paste' of copyrights, patents, trade marks and trade secrets, has served its purpose for an emerging nation that craves respect as a world power. It has not only reached its use-by date but is souring China's relations with trading partners.
More to the point, in a centrally planned economy about to embark on a new level of sophistication, how can the authorities encourage the growth of hi-tech industry which will be underpinned by innovation and research without respecting and enforcing intellectual property rights at home?
Given that piracy has become so entrenched, it will be a difficult change to manage to the satisfaction of foreign critics, but there are positive signs that the problem is being taken seriously. More could emerge during the visit to Washington next month by President Hu Jintao. The stage was set last week in high-level talks in the American capital during the annual forum known as the US-China Joint Commission on Commerce and Trade. Senior Chinese officials were led by vice-premier for economic matters Wang Qishan. The official Chinese version of the outcome circulated by Xinhua said the two countries had agreed to 'enhance co-operation' to protect IPR. As far as the Americans are concerned, the Chinese officials pledged to crack down harder on software piracy and other IPR violations. US trade representative Ron Kirk praised Wang for agreeing to personally oversee a public campaign to reduce IPR theft, and made it clear the results would be measured by increased US sales of legal software in China. The Americans tend to place great store by the involvement of a Chinese official as senior as Wang because sometimes that is what it takes to make difficult changes. We trust they are right this time.
That said, Beijing did recently announce a six-month crackdown on piracy, but such a one-off high-profile initiative smacks of a political sop to Washington and other capitals amid tensions over trade and currency issues. Now is the time to adopt a permanent stance that delivers tangible benefits, and not just a campaign for political purposes.