Things are changing quickly as China cracks down on fake goods
It used to be that people loved coming to China to buy fake stuff. I once chatted with an English flight attendant who said that airline crews often fight over Chinese flights in the lead-up to Christmas just so they can buy loads of cheap stuff to gift friends and family.
But that’s all changing.
Why? Because China’s central government, as well as regional governments around the country — particularly Shanghai — are coming down hard, no longer allowing merchants to make a quick buck selling rip-off versions of famous international brands.
China’s market regulator is just one organ entering the war against the makers and sellers of fake goods (and other instances of intellectual property violation). These moves are not only designed to protect domestic and international brands, but also to look after consumers who may not be aware that what they are buying isn’t the real deal.
This is because the government wants the world to know that China is open for fair and honest business, and that China is a place where intellectual property is respected and protected.
One figure that shows how much the attitudes of Chinese businesses have changed over the years is the amount paid to international companies in exchange for the use of intellectual property. In 2001, just US$1.9 billion was spent, and that figure raced to US$28.6 billion in 2017.
As one famous example, the owners of Peppa Pig saw an increase in IP income of 700 percent in the first half of 2017 alone, due in no small part to the explosion in popularity of the little pig and her friends here in China. Peppa really brings home the bacon! That particular brand is such a cash cow — or pig — for its owners that the world’s first Peppa Pig play world is currently being constructed in Shanghai.
The city’s upcoming import expo is another great thing for this city, and China in general, when it comes to intellectual property and the clampdown on the manufacture and sale of goods from the mystical land of shanzhai (copycat).
Just last month the Shanghai government launched the Intellectual Property Service Association as the city moves toward its goal of becoming a leading science and innovation center. Vice Mayor Chen Qun said that Shanghai is “eager to become geared to international standards on intellectual property protection.” And that is definitely super important.
On top of that, Shanghai’s procurators announced that between January of 2016 and May this year, 648 suspects in 409 intellectual property infringement cases were charged for IP theft or misuse.
The Intellectual Property Court also recently granted the highest amount in damages for a software piracy case: 15.05 million yuan (US$2.2 million).
And the measures are working, with Shanghai slowly becoming a more welcome and nurturing place to create ideas. The city saw more than 131,700 patent applications last year, finally granting about 72,800, an increase of 17.2 and 10.4 percent respectively over 2016.
This is a great development and will no doubt add impetus to Shanghai’s plans to become an important, global city by 2035.
Even on an individual level it’s exciting, especially since fake products have been so common that Chinese people are extremely picky — and rightly so — when buying goods online. This led to the huge success of platforms like JD.com, which was set up partly as a way to offer genuine goods online to consumers.
This distrust in locally produced goods has sent billions of dollars out of China, partly fueling the careers of people who buy goods overseas to sell to wary Chinese (daigou). If I can log on to Taobao and buy a carton of New Zealand milk and know, 100 percent, that it’s genuine and safe, that will be a great thing.
The idea of China as “a magical land of fake goods” is rapidly coming to an end. Maybe soon those English airline crews will fight over flights to Shanghai for its world-class museums, amazing food and its creative and open atmosphere.