The world’s factory of counterfeit goods
Countless items can be—and are being—counterfeited in China, from drugs, to electronics, to clothing. Even money itself is a target: Chinese news outlets reported that fake banknotes with a face value of RMB214 million ($33.2 million) were seized in Shànweˇi, South China, in January. Counterfeiting isn’t just a branding nightmare: it harms buyers too.
Although mainstream news often focuses on fake designer handbags or clothing, fashion is just one of many industries targeted by counterfeiters. Gordon Gao, partner at Chinese firm Fangda Partners, explains that counterfeiting of handbags and clothing is straightforward, but with counterfeit drugs or technologies, “the issues are usually more complicated or technical” and therefore harder to communicate to the public.
“The counterfeiting of medicines, auto parts, aircraft parts, drinks, and food items should be publicised much more,” says Matthew Murphy, partner at Chinese firm MMLC.
“The rapid evolution of technology has made counterfeiting technology products much easier than before, but enforcement actions relating to counterfeit electronics are usually more difficult,” according to Alan Chiu, partner at Hong Kong-based firm Ellalan.
He says the technological elements such as apps, hardware, and software mean that there are other overlapping issues, often involving copyright and patents, which add complications which aren’t present in more straightforward counterfeit cases.
Fakes: the facts
China was identified by the European Commission as the country with the most “persistent and longstanding problems” in relation to IP protection and enforcement in its March 2018 “Report on the protection and enforcement of intellectual property rights in third countries”.
Another report, commissioned by the International Trademark Association and the International Chamber of Commerce—“The Economic Impacts of Counterfeiting and Piracy”, February 2017—identified China as the primary source of counterfeits imported into the EU. The US “Review of Notorious Markets 2017” similarly identifies China as the “primary source” of counterfeit products and notes that efforts to address the widespread problem have been “inconsistent”.
