With the official state visit of Chinese dignitaries now concluded we can stop holding our breath for meaningful trade reform including the much examined issue of patent and copyright protections. As usual, this was the most discussed economic topic and not the 57,000 closed plants and millions of lost manufactruing jobs. Dean Baker believes there is a class motivation for this emphasis.

http://www.cepr.net/index.php/blogs/beat-the-press/chinas-pirates-currency-and-class

“From the standpoint of manufacturing workers and those whose wages might be affected by an increased demand for manufacturing workers (e.g. those without college degrees), the lower the value of the dollar against the Chinese currency the better. For this group, it matters little that China may not pay Microsoft the fees that it is claiming. In fact, it could very well be beneficial to these workers if China does not respect U.S. intellectual property claims since it will mean that they can buy products produced in China at a lower cost.

The situation is of course the opposite with the highly educated workers who will likely get increased pay if China adopts a strong intellectual property system. The shareholders of the affected companies will benefit as well.

This disparity in interests is undoubtedly central in the Obama administration’s negotiations with China. It understands that the more it can get in terms of enforcement of intellectual property claims, the less it will get in terms of appreciation of China’s currency.

There also is the very real market consideration that if China is paying more in royalties and licensing fees to the United States, then its currency will have a lower value than would otherwise be the case, disadvantaging U.S. manufacturing workers.”