Why is Piracy so Common in China? Confucian Cultural Traditions or Just Plain Commercial Advantage? (A Historical Perspective)

I usually write about current international copyright issues but occasionally I dip back into the past to look at where copyright has come from. Sometimes this can be very illuminating in terms of what is happening today. A couple of years ago, I wrote about the thriving pirate book industry in Taiwan back in the 1960s and 1970s when the “ingenious rascals” of Chungking Street in Taipei routinely disassembled, photocopied and reprinted western books, from encyclopedias to medical texts.  And all this was perfectly legal under local law in Taiwan at the time.

These were the laws of the “Republic of China”, implemented and enforced by the Kuomintang (KMT) regime that administered Taiwan from 1945 on. The KMT had loosely governed China from the overthrow of the Qing (Manchu) dynasty in 1911, through the period of war with the Japanese in the 1930s and 1940s, up until 1949 when the “People’s Republic of China” was proclaimed by Mao Zedong in Beijing. The KMT then decamped to Taiwan (which had been ruled by Japan up to 1945) where the existing Republic of China laws continued to apply. Among these was a copyright regime that protected only works that had a Chinese copyright registration, which was notoriously difficult to obtain. At the time neither the Republic of China (Taipei), nor the People’s Republic (Beijing) was a signatory to the Berne Convention.

Respect for copyright in China, or lack thereof, has been a recurring topic over the years. While China is very much in the spotlight for intellectual property (IP) violations, generally these are infringements that relate to trade secrets, patents or trademarks, including forced transfer of IP from companies seeking to invest in China. However, copyright has not been exempt from complaints as repeated reports by the US Trade Representative’s Office clearly show. For example, the most recent USTR Special 301 report on China, issued in April of this year, states that;

“It is critical that China address major deficiencies in its copyright framework, such as the lack of deterrent civil damages, ineffective criminal enforcement, and the failure to provide protection against the unauthorized transmission of sports and other live broadcasts.”

The report also raised concerns around digital piracy. These relate to distribution of unauthorized audiovisual content and dissemination of unauthorized copies of scientific, technical, and medical journal articles and academic texts, as well as China’s failure to take sustained action against websites, devices or apps that offer or facilitate access to unlicensed content.

Mind you, the section on copyright was mild in comparison to the criticisms of China’s failings in a range of other areas of intellectual property. In the past, criticism of China’s copyright practices has ranged from widespread book, DVD and music piracy to failure to establish or enforce effective copyright laws. The lack of effective enforcement remains a concern today. The most recent annual IP index produced by the Global Innovation Policy Center of the US Chamber of Commerce scores China at 2.53 out of a possible 7 in the area of copyright, or 36%.  Let’s just say there is lots of room for progress. By way of comparison, Japan’s copyright score was double this.

The reason for China’s lack of robust IP protection, including in the area of copyright, has been attributed to a number of factors. A common academic view seeks to explain China’s lack of respect for IP as a cultural phenomenon. Here is a good example of this line of argument, based on supposed Confucian cultural and moral values. It is taken from a respected academic journal, titled “The Dissonance between Culture and Intellectual Property in China”.

“The primary orientation of Chinese culture is toward mutual reliance…One distinction is that all forms of creativity are for the collective; any copying or imitating is a high form of flattery…”

It is true that some Confucian values still permeate traditional Chinese world views, but do they really explain rampant copyright violations in China? Are copyright pirates in China motivated by a desire to flatter the artists they are stealing from? Hardly.

Another take on explaining widespread copyright piracy in China comes from what is often considered to be the definitive work on the subject of Chinese copyright and its traditions, William P. Alford’s “To Steal A Book is an Elegant Offense”, (Stanford, 1995). In this widely-quoted work, the author postulates a number of reasons for China’s weak IP performance, reaching back far into history. At the risk of oversimplifying Prof. Alford’s opus, his main thesis is that while China appears to have had a form of copyright (and trademark) protection extending as far back as the Tang dynasty, in actual fact these regulations were primarily intended to protect the power and prerogatives of the state rather than the works of individual artists or authors.

“Virtually all known examples of efforts by the state to provide protection for what we now term intellectual property in China prior to the twentieth century seem to have been directed overwhelmingly toward sustaining imperial power”.

Thus it was forbidden to reproduce government works on astronomy, the civil service examinations and other matters considered sensitive for purposes of security and censorship, but when it came to private ownership of materials, there was no legal tradition of protecting original works. Indeed, Alford points out that “the Confucian disdain for commerce fostered an ideal, even if not always realized in practice, that true scholars wrote for edification and moral renewal rather than profit”.

However, while a true Confucian scholar might disdain profit, the merchant class were entrepreneurial and aggressive—one might even say rapacious—in their drive for profit, including in the publishing industry. They had no hesitation in reprinting whatever they could (avoiding the pirating of government publications that would land them in trouble), yet at the same time they devised a sort of code that regulated their conduct toward each other. When it came to pirating foreign materials, however, that was another matter.

At the end of the 19^th century, the Qing Empire was on the verge of collapse. The Chinese had been thrashed by the Japanese in the Sino-Japanese War of 1894-95 (which led to the Japanese occupation of Taiwan) and European powers were tearing at the hem of China, nibbling off little pieces for themselves. Chinese reformers recognized that China needed to adopt some western values, including promotion of modernization and innovation. The development of IP laws was considered one element of this. At the same time, the European powers were keen to impose on China (at gunpoint if necessary) various obligations to protect their own economic interests, including copyright. As a result several bilateral treaties were signed between China and European countries and the United States regarding IP protection, although the Chinese were slow to implement these obligations into law, and even slower to attempt any enforcement. For example while the US and China signed a bilateral treaty providing for reciprocal protection of copyrights and trademarks in 1903, the Chinese did not get around to enacting their first copyright law until 1911. That was the same year that the Qing Empire collapsed and China entered an extended period of internal turmoil. Needless to say, given the prevailing political situation, enforcement of copyright was not a high priority for the new Republican government.

The lack of statute law protecting copyright under the Qing Empire was thus a major obstacle, and is advanced as one reason for widespread tolerance of book piracy in China. Foreign publishers were regularly pirated, but did this occur because of a lack of understanding of the fundamentals of copyright, or was it simply a case of commercial opportunism? An interesting new work has just been published that calls into question much of the conventional wisdom regarding Chinese attitudes to copyright, and suggests that Chinese publishers, booksellers and authors were well aware of the importance of copyright at the beginning of the 20^th century and later, at least insofar as it applied to them and not to foreigners. The book, “Pirates and Publishers: A Social History of Copyright in Modern China” (Princeton, 2019) by Prof. Fei-Hsien Wang, argues that;

 “contrary to common belief, copyright was not a problematic doctrine simply imposed on China by foreign powers with little regard for Chinese cultural and social traditions…Developing multiple ways for articulating their understanding of copyright, Chinese authors, booksellers and publishers played a crucial role in its growth and eventual institutionalization in China. These individuals enforced what they viewed as copyright to justify their profit, protect their books and crack down on piracy…”

And how did they do this? In the absence of a copyright law (in the period prior to 1911) or enforcement of the law (for many years after the law was enacted), the Chinese book trade established guilds with their own registration, code of enforcement, tracking system, detectives (piracy investigators), and sanctions. Wang cites the case of Ginn & Co, the noted US publisher who brought suit in 1911 in Shanghai against the Shanghai Commercial Press, which had reprinted Ginn’s history textbook without authorization. Representing Ginn was T.R Jernigan, a noted commercial lawyer and former US Consul General in Shanghai. Jernigan faced significant legal obstacles because the new copyright law did not apply to foreigners, (despite bilateral treaties being one of the reasons for passage of the law) so he argued on the basis of common law that since Chinese publishers respected and enforced copyright amongst themselves, these local practices should apply to the defendants in the Ginn case. He did not prevail, but the incident helps shed light on an informal copyright code that existed in China—but for Chinese only, and then only some Chinese.

Shanghai was the centre of the Chinese publishing and bookselling industry and naturally enough this is where the copyright guilds emerged. There were two main groups, the Shanghai Booksellers’ Guild and the Shanghai Booksellers’ Trade Association. Titles were registered based on the original printing blocks (shudi or master copy) for works, or type plates or paper stereotypes for letterpress printing. Generally members of the guild respected each other’s banquan (the word today used to translate “copyright”, which can be literally translated as “the authority or power to print”), but if there were disputes the guild would mediate. It would also dole out punishments, such as fines and burning of offending copies along with the pirated shudi masters. Sometimes there were negotiated solutions in which pirates could pay to have their editions authorized.

While Shanghai was the main commercial centre, it had rivals in Beijing (known at the time as Beiping after the national capital had moved to Nanjing). The booksellers and publishers in Beijing did not belong to the Shanghai guilds nor did they pay them much heed. Although China was technically unified under the KMT regime in Nanjing, local authorities had considerable power and the national government had a difficult time in enforcing its writ. Local “initiative” was the order of the day and Beijing became the book pirate capital of China.

According to Dr. Wang, in the early 1930s the Beijing representatives of the leading Shanghai publishers petitioned the Beiping city government to act against open piracy, even describing several “notorious markets” (echoing the description in USTR’s annual Special 301 reports today) where pirated works were sold openly. Like today, there would be a raid and then the zeal of the local authorities would fade. The Shanghai publishers realized that they needed their own people on the ground to ferret out the pirates and so they formed their own team of private investigators. (Sound familiar?). The investigators would build a case and present it to the Beiping authorities, who might or might not act, particularly since most of the so-called banquan was not legally registered copyright but was rather the unofficial copyright registered with the Shanghai guilds. Moreover, as Dr. Wang points out, while to the Shanghai publishers the Beijing booksellers were pirates, to the local authorities they were “business leaders” who deserved to be sheltered.

The experience of the Shanghai publishers from the early 1900s until the late 1930s when much of China was taken over by the Japanese is eerily reflective of the experience of many western copyright holders in China in recent years. Even today, despite the presence of strict laws against copyright and other forms of IP theft, pirated and counterfeit goods are sold openly, often in “notorious markets”. Private companies and associations have resorted to hiring private investigators to gather evidence to bring before Chinese courts. On occasion there is a big bust or anti-piracy (“strike hard”) campaign, which then peters out once the time period of the campaign is over. Frequently local authorities are not interested in pursuing IP crimes or are actively engaged in protecting local interests engaged in pirating or counterfeiting activities, which they see as contributing to local economic activity. In short, nothing much has changed. USTR’s Special 301 Notorious Markets report lists a number of physical and now online marketplaces in China dedicated to selling pirated and counterfeit products. In fact, China tops the list with no less than 7 named physical markets plus 3 online markets.

They say that those who fail to learn from history are doomed to repeat it. It was revealing to me to see how similar the experience of the Shanghai publishers was in Beijing eighty or more years ago compared to the struggles faced today by both foreign and Chinese copyright holders seeking to protect their rights. For the Shanghai book sellers of the early 20^th century, self-help was the only way to succeed in a country with weak copyright laws and limited or no will or ability to enforce them. At the same time, the efforts of the Shanghai publishing and bookselling guilds clearly establishes that Chinese merchants were well aware of copyright and used it to promote and protect their economic interests. They did not subscribe to vague Confucian theories of sharing the common good of knowledge, or of producing content for its own sake. They were hard-headed business people who not only took collective action to protect their own copyright, but when they could get away with it, had no qualms about appropriating foreign content without payment.

Collective behaviour is normally rooted in cultural traditions and beliefs, and it would be wrong to say that Confucian values have no sway in China today. There may even be a residual belief among some Chinese scholars that the notion of copyright to protect individual economic interests and moral rights (which incentivizes more creation) is at odds with traditional collective Confucian beliefs. But that is a very thin cloak to use as justification for wide-scale IP theft in China. A look back a century or more into Chinese history (thanks to Prof. Wang’s new book) shows that Chinese entrepreneurs were well able to grasp the importance of copyright and employ it to advance and protect their own economic interests. Where they failed to respect copyright, as in the case of foreign works unprotected by weak Chinese laws, they did so knowing full well what they were doing and did so pragmatically for commercial gain, pure and simple. Confucius the scholar may be turning in his grave but Cai Shen, the God of Wealth, is laughing all the way to the bank.

© Hugh Stephens, 2020. All Rights Reserved.