About ten years ago, counterfeit products primarily affected only the luxury goods industry. Today, fakes are seen in all sectors. Counterfeiters are making increasingly more, and increasingly better watches, as well as handbags, clothes, automobile parts, information technology equipment, food, alcohol, toys, games, cigarettes, DVDs, and, for something that is more than a simple plague but a true catastrophe, medicines (80 percent of which are distributed in Africa).
The rise in fake products is closely tied to globalization that, by deregulating international transactions and dropping customs’ barriers, has made parallel commerce not only easier but also much more lucrative. Counterfeiters also show incredible boldness as seen by what happened recently to the electronic equipment maker, NEC. The activities of the Japanese enterprise were copied in their entirety. More than fifty pirate production sites, discovered in China, Hong Kong, and Taiwan, all worked for a parallel NEC. These sites not only copied the materials produced by the real NEC, but they also engaged in research and development in order to introduce new fake NEC products into the marketplace.
We have also heard (although we have not been able to confirm this information, but if it is not true, at least it is quite possible) that a similar situation happened to Rolex. The Swiss brand discovered a false Rolex store in China where everything, from the watch to the guarantee, including the store logo and brochures, was fake!
Of this global fraud, 54 percent takes place in China, 7.5 percent in Taiwan, and 3 percent in Hong Kong. Besides the manufacturing capabilities of these countries, it is certainly not by chance that counterfeiting is happening there. The concept of intellectual property was invented in Europe during the Age of Enlightenment, but was not introduced into China until the end of the 1970s, and a general law was only adopted in 1991. But beyond the legal apparatus, which is more or less enforced, the notion itself of intellectual property has not yet made its way into the collective mentality of the Chinese people. The status granted to the copy in Chinese civilisation is quite different than what we observe in the Occident. It is by tirelessly copying thousands of characters, which are so similar to each other, that a child learns how to write. Copying a well known work was in the past – and still is today – elevated to the rank of a true art form and a way to pay homage to the artist (thus the anecdote by Nicolas Occis relating to a large mural decorating a Chinese airport which reads: “…one of the most famous artists of his time, so popular that he was copied many times”). Interestingly, the Chinese verb xue signifies “to learn” as well as “to copy.” Thus, in China, copies of classic art works can attain prices comparable to those of the original, since it is not so much the authenticity that is important as it is the quality of the execution.
In addition, the notion of value and property in China relates only to the material and tangible reality. An idea, a patent, or worse yet, a brand, are not material, and therefore have no material value. Lastly, in the Occident, the notion of intellectual property is closely related to the affirmation of the primacy of the individual, and of individual rights. On the other hand, Chinese society gives pre-eminence to the group over the individual, and stresses the concepts of hierarchy and submission.
This cultural context explains, to a large degree – although it does not excuse –the flourishing and lucrative counterfeiting industry in China. These activities account for 30 percent of the interior market and affect as much as, if not more, the Chinese brands than the foreign brands. It is also clear that the makers of copies take shelter under the cultural umbrella to justify their practices. It would seem that the counterfeiting industry still has many good days ahead of it before it is globally perceived as a crime, and will only disappear with the economic development of the nation.


Source: Europa Star October-November 2006 Magazine Issue