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MARK AUSTIN THOMAS: It's day two of U.S. Commerce Secretary Carlos Gutierrez's visit to China. This morning he spoke to an audience of American and Chinese business leaders. He urged them to do more to crackdown on pirated goods and infringement of intellectual property rights. Ruth Kirchner has more from Beijing.

RUTH KIRCHNER: Gutierrez pointed the finger at criminal gangs and their illicit trade in goods ranging from music and film to medicine and car parts. He warned that failure to crack down could fuel an American backlash.

CARLOS GUTIERREZ: Another victim of widespread IP theft in China is American support for expanding our trade relationship.

Gutierrez said to fight piracy China also needs to open its markets more widely, especially to U.S. entertainment companies.

GUTIERREZ: The current barriers to entry for legitimate goods in the Chinese market create a haven for pirates. If the only way that people can access these movies and motion pictures is through pirated products they will do so.

Pirated copies of Hollywood blockbusters sell for as little as $1 in many Chinese cities.

Overall piracy is costing U.S. industry an estimated $2.3 billion a year from lost copyright revenues.

In Beijing, I'm Ruth Kirchner for Marketplace.