THE song blaring out from the loudspeakers inside the small computer store in Zhongguancun, Beijing's Silicon Valley, seemed oddly appropriate. ''You're the real thing, even better than the real thing,'' Bono sang as the customers looked over pirated software and computers with logos just a hair's breadth away from a major trade-mark infringement. The irony of the situation was lost on the owner of the store, who doesn't understand English. He was, however, only too happy to admit that his copy of U2's best-selling album, Achtung Baby, was also pirated. ''You can't get the real thing in Beijing so, of course, I had to get a pirated version. Besides, it's a lot cheaper,'' he said. It has been more than two years since China's first copyright law went into effect, but violations of intellectual property rights are still commonplace and, according to some observers, have got worse. ''I have seen no improvement in the situation over the past two years whatsoever,'' said an executive with a mainland publishing firm. ''In fact, in book-publishing at least, there has been a significant increase in violations of copyright.'' Perhaps the most blatant example of copyright violation occurred last year when large sections of works by Zheng Sicheng, an expert on intellectual property rights protection, were pirated by the authors of The Encyclopedia of Laws on Intellectual Property Protection. The two authors, who could hardly claim ignorance of the law as mitigating circumstances, were each eventually fined 5,000 yuan (about HK$6,700 at the official rate), and the publishing house was fined 40,000 yuan. Today, observers say, violations of intellectual property rights tend to be far more the result of malicious intent than lack of awareness about what protection entails. ''Up until recently many publishers genuinely didn't realise they were doing anything wrong when they pirated books and who could blame them? There was no law to say they shouldn't do that,'' the publishing executive said. ''Today, everyone knows about copyright, but they still do it,'' he said. ''That's the big change. People will rip you off as soon as look at you.'' And the rip-offs are becoming increasingly sophisticated, particularly in the field of trade marks. One Chinese watch manufacturer, for example, has brought out a model whose design and logo bear a striking resemblance to a well-known Swiss brand, but included just enough modifications to ensure its design is not technically in violation of the trademark. Nevertheless, the design is similar enough to cause confusion for consumers and has allowed the Chinese company to make substantial profits from using another company's design. In the clothing industry, trade-mark infringements continue with reckless abandon as CNN's doyen of style, Elsa Klensch, discovered on a recent shopping trip to one of Beijing's numerous outdoor clothing markets. ''Oh look, Liz Claiborne,'' Ms Klensch exclaimed as she browsed through a selection of silk suits, ''I think Liz would be rather surprised to find her name here.'' Trademark infringement was cited by the United States chief textile negotiator Jennifer Hillman last week as one of the three main obstacles to a new Sino-US bi-lateral textile agreement. Unless the problem was solved, Ms Hillman said it was highly unlikely a new agreement could be reached. But unless China's copyright, trade mark and patent laws are rigorously enforced and higher fines and longer prison terms handed down to offenders, the chances of significant improvement are remote.