Chinese Counterfeit with Chinese Characteristics

Fake Apple Store, by URI FRIEDMAN

Last week I went to buy a new portable hard drive. In one electronic shop that had a one-bite-absent-apple sign at their front door, I saw a Samsung 320 G at 500 RMB. That is about 85USD, which sounded like a proper price because the same model was sold at 75 USD on amazom.com. Still I tried to bargain a bit.

My bartering effort humiliated the shop owner gravely. She mocked at my attempt to buy a real Samsung at a price lower than the procurement cost, but considering that I was an “old customer” (I have never been to that shop before), she made up her mind to a magnanimous bestowal of good buy on me and agreed to sell it to me at 450 RMB, with great pain.

After paying the money, half-jokingly I said: “I am going to check the series number and come back to you if it is a fake.”

Hearing this, her face suddenly became frozen. After a time of two seconds her pretentious smile faded into a deep frown of dislike and disgust. Throwing the money back at me she said: “of course it is not the original Samsung, buy an original Samsung at 450 yuan in your dream!”

I quickly disappeared from the shop under the impression that I would lose my life if I stay in there for one more minutes. I spent the rest of my day wandering on the cool streets of this small city and reached the conclusion that real portable hard-drives, be it Samsung or Lenovo, do not exist here.

For those who know China well, it is not a surprise. It is a country that is famous for manufacturing, consuming and exporting counterfeit products to all over the world. Under my own observation, there are four kinds of counterfeit in China targeting at different but overlapping groups of customers, but serving only one purpose: money making.

The first type is the sham luxury brand. In the famous Silk Street Market in Beijing, Gucci and Prada made in small family workshop in Wenzhou are shamelessly displayed but honestly priced. On the Chinese popular online shopping platform, luxury hand bags are sold from 10 USD to 100 USD according to the level of resemblance.  They are either sold to the status seeking people who wittingly try to express themselves via those glistening labels made out of fake jewellery, or to the bargain hunters who were unwittingly cheated by the industry.

The second type of fake good targets at ordinary consumer goods loaded with intellectual properties. My childhood was entertained by pirated DVDs and CDs. Fake books are available at one tenth of the original price and are widely popular among the educated. In any electronic goods market one can easily find iPod Players of the accurate appearances being sold at 10 USD. When iPhone firstly became popular in China, my father bought a fake one at one third the official price. The “Shanzhai(Chinese for fake)” iPhone totally ruined  his appetite for any apple product, despite the fact that he never knew that it was a fake.

The third type of counterfeit is not uncommon in many parts of the world—fraudulent certificates. But in here, it has—as does everything else that has gone wrong in the country—the Chinese characteristics.  Before writing this article I talked to a Chinese Frank Abagnale Jr. online. He told me to send him 300 yuan (50USD) for a degree of my Alma Mater. He also showed me a scanned sample of the diploma which was really of high craftsmanship. The combination of price and quality would have persuaded me, if I did not have one already. But for those who have not, it is hard to say no. On July the 3rd this year, a former official of the Ministry of Education was prosecuted for swindling Chinese students into non-existent US colleges. Three months ago, nine people for charged for selling bogus degree from non-existent US colleges at $ 30,000 each to Chinese CEOs.

The last type of counterfeit involves food and drugs and jeopardizes health and even life of many. The melamine contaminated milk scandal in 2008 was one good example. Watered-down milk which was added with melamine boost its protein level hospitalised thousands of babies and enraged the crowd. Though the government took every measure possible to restrict media report on the affair, the damage of this incident to the fledging Chinese Dairy industry has been paramount.  Again in 2008, a Chinese made blood thinner Heparin used significant quantities of a chemical in substitute of the key ingredient of the drug and caused 80 deaths in the USA. In a raid in earlier this month, the Chinese seized 182 million of counterfeit pharmaceuticals including drugs for high blood pressure, diabetes and even rabies, and detained nearly 2,000 suspects.

Economists told us that there is a market because there are both supply and demand. That could partially explain the thriving counterfeit markets in China despite the government and businesses’ effort to stamp them down. During the past decades, commodity prices in China have become more and more international while house-hold income stays local. Personally, if a movie ticket takes up 1/20 of my monthly income and a real book amounts to 1/4 of it, I would rationally prefer some cheaper alternatives at the expenses of quality, and conscience probably.

In other cases, people make fake product without being aware of the consequences, and more than often, they have no other better options. In some regions in China, local big dairy companies monopolized local raw milk market and suppressed the price to as low as 2.8 Yuan(less than half dollar) per kilo. The desperate small dairy farmers, most of them were illiterate, had to use the “magical white power” that could miraculously multiple their milk productions.  For them, fine and imprisonment only make matter worse.

Sources:

the economist , 2012. A quick study. Available at:

http://www.economist.com/node/21558318.

Burkitt, L., 2012. World News: Beijing Says Counterfeit Drugs Seized. Wall Street Journal [New York, N.Y], 06 Aug. p.A.8.

McCabe, A., 2008. China’s dairy industry a mess over tainted milk; Thousands of babies have fallen ill; melamine added to boost profit. Times – Colonist [Victoria, B.C], 20 Sep. p.A.12.

Rockoff, J., 2008. FDA widens probe in Heparin deaths. McClatchy – Tribune Business News [Washington] , 06 Mar.

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