China's Addiction to Counterfeiting
Image Credit: Flickr/ Harald Groven

China's Addiction to Counterfeiting

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In June 2010, plaintiffs representing Gucci America sued Weixing Li, Lijun Xu, Ting Xu, and others for selling fake luxury products online. Last month, Judge Richard J. Sullivan of the Southern District of New York ordered the Bank of China to name any customers who’d sold such products in 2010. Meeting with Chinese President Xi Jinping earlier this month, U.S. Secretary of Commerce Penny Pritzker claims she told him: “you can’t keep stealing things.”

This was in reference to cybersecurity and intellectual property theft, which is incredibly widespread in China. Have you heard China’s theme song for the 2022 Winter Olympics? Or seen the new sculpture in Xinjiang? Or been to the alpine village in Huairou? Well, they’re all knock-offs, and China has a lot of them.

China’s actually pretty good at producing fakes. Not only does it produce them in great quantity (between 2008 and 2010, 70 percent of all counterfeits seized globally came from China), it produces fakes of great quality too, such as Apple stores that look so real even the employees don’t know they’re fake. There’s an Apple store in Kunming so convincing it’s been described as “an astonishing piece of extreme bootlegging” (I’ve been there, and yes, it is).

Another type of intellectual property theft is plagiarism, and China excels here too. According to one study of biomedical literature, from 2008 to 2012, “China retracted the most papers for plagiarism and duplicate publication.” China is actually second only to the United States in the number of scientific documents it’s published, but as Evan Osnos writes in Age of Ambition, “on measurements of quality (how often the average paper was cited by others), China was not even in the top ten.”

The reason for this, he notes, is simply because academic fraud is “rampant” in China. He further points out that “a journal at the University of Zhejiang used CrossCheck software to scan for plagiarism and found that nearly a third of all the papers it received contained plagiarism or sections copied from previous papers. In a government-backed study of six thousand Chinese scientists, one-third admitted that they had fabricated data or plagiarized.”

In 2013 Lin Songqing of the Chinese Academy of Sciences wrote, “Academic corruption is gradually eroding the marvelous and well-established culture that our ancestors left for us 5,000 years ago.”

It’s affecting the economy too. Alibaba founder Jack Ma recently commented, “I don’t believe success can built on dishonesty,” explaining that fake products have hurt his company and the Chinese economy at large. But there are three things we should keep in mind here.

First, this is partly a developmental issue. The highest-ranking nations on the 2014 Intellectual Property Rights Index are also the world’s wealthiest. But they didn’t all get there by respecting intellectual property rights. As economist Ha-Joon Chang has pointed out, Hong Kong, the Netherlands and Switzerland “refused to protect patents until the early twentieth century.”

Second, and I’ve written about this with regard to Korea’s plagiarism problem, much of this stems from a different history of academic training, as opposed to malicious theft (as is the case when we see plagiarism in the West). Therefore, while still harmful, it deserves to be considered with a different moral weight.

Third, and most importantly, Beijing is already focused on the problem. China became a member of the World Intellectual Property Organization in 1980, the Paris Convention for the Protection of Industrial Property in 1985 and the Madrid Agreement for the International Registration of Trademarks in 1989. In 1992 it signed a bilateral agreement with the United States for copyright protection and in 1995 it signed the Sino-U.S. Agreement on Intellectual Property Rights.

Furthermore, the National People’s Congress passed the Trademark Law in 1982, the Patent Law in 1984 and the Copyright Law in 1990. These laws have been revised numerous times; the Trademark Law, for instance, was amended in 1993, 2001 and 2013.

Beijing therefore clearly cares about this issue. Nevertheless, its failure to adequately protect and enforce these laws landed China on the Office of the U.S. Trade Representative’s Priority Watch List in 2009 and again in 2014. So what’s the problem?

China does have a system in place to enforce these laws, including a State Intellectual Property Office and intellectual property courts in certain cities, e.g. Beijing, Shanghai, Guangdong, and Tianjin. And in 1995 Beijing passed laws to guard against the international flow of counterfeit goods. Also, in 2010 China’s Supreme Court filed 41,000 copyright infringement cases — a 27 percent increase from the previous year.

The problem isn’t with Beijing, but with local authorities who enforce national statutes with varying effectiveness. The difficulty of managing these authorities isn’t surprising given China’s size and problem with political corruption. But as Dan Harris at China Law Blog writes, in China, intellectual property “is going to be much more closely tied to its own self interest, as opposed to the dictates of outsiders.” We can expect to see things improve, he adds, “but very, very slowly.”

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