Pros and cons of IP aside, the fact of the matter is that American companies have the money and talent to do high quality R&#38;D.  Most Chinese companies simply don't have the capital to do R&#38;D to the standard of a developed country, and most talents go work for western companies that have the money.<p>If IP laws were enforced in China, Chinese companies would be further kept at the bottom of the food chain, making cheap products in sweatshops at very low margins.  The IP policies in China is meant as way to jumpstart domestic companies by letting them compete in higher-margin value-added goods when they don't have the ability to do their own research.  The policy-makers know that they suck at most things, especially as a venture capitalist, so they go with the least-interfering approach.<p>Of course, eventually they'll have to enforce IP to sustain their own R&#38;D, once their industries mature.