The counterfeiting of the Middle Kingtom: U.S. Trade Report highlights ongoing problems with the fake trade in China

May 5, 2010 § Leave a comment

A recent U.S. report on intellectual property rights reveals that China remains the global powerhouse…in producing fake goods.

The U.S. Trade Representative’s annual “Special301” Report monitors the ability of our trading partners to protect intellectual property rights abroad.

There were several developments in the fight against fakes, but of all the information shared in the report, the most jarring was that China’s practices remain “unacceptable.”

The report ranks countries according to how well they fought the fake trade in the past year. It asks whether a country was able to toss a handful of tacks across the path of their country’s sham parade and give it a limp.

As the report indicates, some countries made the road a bit rougher for the fake traders with initiatives that tore at the soft undersides of their feet – if only they wore shoes with authentic soles – while other countries, it seems, weren’t terribly concerned.

The good news: Several Eastern European countries have made notable progress, including Czech Republic, Hungary, and Poland. Each was taken off the “watch list” because of significant progress curbing the sale of fake goods.

The bad news: China remains at the top of the watch list.

China has been repeatedly encouraged to improve its enforcement standards, and while slight progress was made – this year only 79% of fake goods stopped at the U.S. border were made in China, compared to 81% in the previous year – even apparent improvements can be misleading.

The decrease in the number of seizures of fake Chinese products at U.S. borders doesn’t necessarily mean the amount of fake goods made in China has gone down, though we’d be ecstatic if it was the case. Sadly, this number reflects only the efforts of our border security and the origin of the fakes they were able to stop – kudos for their fine efforts.

At its worst, the decrease means that whoever is trafficking Chinese counterfeits has gotten better at hiding the sham goods from authorities.

Either way, China’s failure to implement stricter penalties for counterfeiting is corrosive.

The question is difficult, but simple: does China have real interest in stopping counterfeiting inside its borders?

The amount of money produced by the fake trade is staggering: over $600 billion a year by conservative estimates. For the global leader in production, this means a huge amount of money that is circulated in the Chinese economy and, regrettably, fuels other businesses.

More cynical thinkers (or, in certain schools, realists) might believe China isn’t overly concerned with the problem because to really confront it would suck huge amounts of cash out of their economy.

It is crucial we understand the amount of money tied to the fake trade, but remember that at the core of our fight is the defense of human rights. There is no price tag for unalienable liberty.

So while we use the watch list as a barometer for progress in the fight against fakes, the figures are irrelevant without awareness of the human lives at the heart of the issue.

Never lose sight of the suffering and injustice behind these numbers.

As the demand for fakes shrinks, so do the dollars. If we shrink this demand far enough, the only thing left standing will be a gleaming exemplar of unfettered humanity.

And that will be a good day.

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