Commerce secretary says China should enforce intellectual property rights

China should strengthen enforcement of intellectual property rights and continue relaxing currency restrictions, Commerce Secretary Carlos Gutierrez said Monday.

He also said the United States should resist domestic pressure to establish trade barriers because they would harm both the U.S. and the global economy.

"Last year, the majority of patent applications in China came from Chinese innovators," Gutierrez said in a speech. "It is in China's own interest to encourage domestic innovators. China has a stake in promoting intellectual property rights."

He said that last year, two-thirds of all phony goods seized by U.S. customs came from China and 90 percent of the software sold there is pirated.

"Intellectual property rights must be respected for knowledge-based economies like ours," he said in a speech to the 18th annual Update Conference on Export Controls and Policy, a business group. "These rights have never been more important for us and going forward will be more important."

He said China has promised a crackdown "but we will see if they live up to their commitments."

Gutierrez also said China has made meaningful progress on currency reform but needs to do more.

China decided on July 21 to make its currency, the yuan, about 2 percent stronger against the U.S. dollar and drop its peg to the dollar in favor of a restricted float against a group of foreign currencies. Chinese officials have said repeated currency adjustments are not likely any time soon.

Some American manufacturers contend the yuan now is undervalued by as much as 40 percent, which would make Chinese goods cheaper in the United States and American products more expensive in China. U.S. manufacturers argue this is the principal reason for the huge trade gap between the two nations, which surged to $162 billion (euro135 billion) last year, a record U.S. trade gap with any country.

Gutierrez said the United States should resist "medieval recommendations from isolationists" to establish trade barriers.

"Protectionism is a concept of the last century that doesn't apply the world's greatest economy that has led the world to free and fair trade" he said, AP reported. V.A.