QUESTION 1.
China today is well on its way to becoming the unrivaled capitalist superpower of the 21st century, with a booming economy, its permanent seat on the UN Security Council (one of only five), membership in the World Trade Organization, and showcasing its firepower at the mega sporting event of the year . . . the Olympic Games. At the same time, China is regarded as the world's "capital of counterfeiting." How is it possible that a country bent on being a leading citizen of the global community can tolerate such rampant violations of intellectual property rights within its territory? What -- if anything -- does China risk by its continuing lack of respect for international standards of fair business practices?
QUESTION 2.
Notwithstanding China's reputation as a largely unregulated frontier when it comes to the strength and power of trademarks, copyrights, and patents, why do you think that so many foreign companies are nonetheless eager to do business in that country?
QUESTION 3.
As you may know, caveat emptor is Latin for "Let the buyer beware!" As we are about to depart for China, what are your thoughts about shopping for -- and possibly buying -- designer accessories that may very well be counterfeit, but which may be obtained for a fraction of the cost of the genuine article?
BONUS QUESTION.
What is the difference between counterfeit (or fake) goods, and so-called knock offs?
Articles-->
http://www.uscc.gov/hearings/2006hearings/written_testimonies/06_06_08wrts/06_06_7_8_chow_daniel.pdf
http://news.xinhuanet.com/english/2008-06/14/content_8366142.htm
http://www.cbsnews.com/stories/2004/01/26/60minutes/main595875.shtml
http://www.america.gov/st/washfile-english/2006/June/20060612124226ASesuarK0.5563623.html
http://www.economist.com/business/displaystory.cfm?story_id=10111006
http://www.nytimes.com/2007/07/25/business/worldbusiness/25soft.html
http://transcripts.cnn.com/TRANSCRIPTS/0505/18/i_ins.00.html
http://www.iht.com/articles/2007/08/03/news/letter.php
http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1179997531348
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17 comments:
1) I don't think these acts make the chinese government very happy but it does happy everywhere in the world. Take "bootleggers" in big cities in the US for example. However it is hard for the enormous population of China to be regulated strictly on quality of products. Every good capitalist finds shortcuts to maximize profits and that is exactly what these counterfeiters are doing. China is at risk of consumer backlash and even boycott if the counterfeiting continues or gets out of hand. Working at a seafood market in the summer we should some fish which were products of China and after reports of possibly toxic chemicals in foods from China just about everyone stopped buying fish from China. Many people asked if any of the fish was from China and would stay away from such products.
2) Foreign companies look to do business in China for a number of reasons. First labor is cheap and they have a lot of available laborers. If workers are employed by the company then the company can dictate and monitor the quality of products produced. However with China's reputation companies also know they may be able to get away with some things that they can't in the states. Right, wrong or indifferent it is the way of capitalism.
3) To me I'm not too worried. I'm not looking to get handbags or other products made out of fine materials like leather which are hard to spot fakes without a trained eye. If im looking to get a shirt its a little easier for me to determine what is decent quality and what isn't. But for me if it looks like a Ralph Lauren Polo but is missing the tag that says it is I'm not overly concerned.
Bonus) A counterfeit tries to fool the consumer into thinking they are buying the real thing, for example a Louis Vuitton bags. Knock-offs are imitations. They try to appear to be like another product but have their own name on it, example Nike Air Force 1 shoes vs. Starbury Crossover.
Jake . . . you make good points in that counterfeiting certainly is not limited to China and also, we're talking about the biggest market for manufactured goods in the world. But still, don't you think that an authoritarian state like China could, if it really wanted to, significantly impact counterfeiting by imposing harsh penalties (for example, China has the death penalty for corruption)? Your example from personal experience at the fish market is a prime reason that the Chinese government must take its role as market regulator seriously, but in the case of IP rights enforcement (or lack thereof), is there an economic downside?
Regarding the minimal effect that counterfeiting appears to have on foreign companies doing business there, I think you hit it on the head: the pursuit of the almighty dollar sometimes has a blinding effect on business ethics, and practically speaking, IP issues probably do not impact the vast majority of commercial trade with China.
1. China risk having less products bought from there country. If China is know for fake items, people are not going to want to buy items from there. Even though China may have real items, real people are not going to believe them. If China wants to become a leading country, they are going to have to clean up everything. In order to be a big powerhouse, the country needs to be trusted. If China full of fake items, many countries are not going to put there full trust in to the country.
2. Many foreign countries are eager to business in China because of all factories they have and the cheap labor. In many countries there are laws against child labor. There are also minimum wages that need to be paid to employees. In China there is no such thing as either a minimum wage or child labor laws. People will do what ever it takes to support there families. Most of the time there are many people crammed into a factory producing goods for about a dollar a day. These people do not know any other way of life. China is also over populated so good jobs are hard to find.
3. As we all depart for China, we are aware that many fake items are sold there on the streets. We have been made aware of the situation and should be aware of it. We have also been made aware that the price of these items is any where from a quarter to half the price. Yeah just as many Americans, I am sure that most of us are going to buy some items to bring back home that are fake. I believe it is ok to buy these items, just do not buy items that could really effect you if they are fake (ex: golf clubs, medicine, and ect……).
Bonus. Counterfeit goods are fake good that are produced with the same label name, as if they were the real thing.
A knock-off is item that looks like the real item but has a different name to it.
Pretty much the difference is the name on the bag.
Amanda states the fundamental basis of commercial transactions, which is trust. Back in the day (before the formal institutionalization of contracts), business deals were consummated on a simple handshake (and an enormous reservoir of trust).
What are the ethical implications -- if any -- of purchasing consumer goods that are obviously fake or counterfeit?
1. I read that 60 Minutes, the news show found a corner shop in Donguan, China, selling clubs by Callaway, the American manufacturer of the famous Great Big Bertha driver. The Chinese government didn’t want 60 Minutes to bring cameras, for some strage reason but 60 minutes did. Inside the store was a club that looked like the Big Bertha. Not only that, they were offered Callaway irons, putters, golf bags, gloves, and even a Callaway umbrella. All of this would retail for close to $3,000 in the United States, was going for $275 because the set was a copy. But at Callaway, they call it counterfeit. This is all unfair for everyone else internationally. They reap the benefits and nobody else. If we were to do it back there would be trouble. They are trade tariff bullies.
2. Evidence of the counterfeiting trade can be seen every day at one Hong Kong warehouse, where counterfeit watches, shoes and computer chips, all copied in China and seized in Hong Kong. Patents, trademarks, and copyrights are so much cheaper to business there. The labor and materials are so much cheaper and the shipping and trade tariff is much lower to ship from china to the rest of the world because China does not buy from anywhere else. Everyday 6,000 shipping containers leave from Hong Kong for America, packed with products made in China. Only a small fraction of those containers are ever inspected. “This is the most profitable criminal venture, as far as I know, on Earth … Counterfeiting,” says attorney Harley Lewin, who has been chasing counterfeiters from China for more than 20 years. “And your partners don’t kill you.”
3. Like they said buyer beware. Im not believeing anyone on the street market but if it looks good and reasonable price the fake may be worth it. Im looking for pearls. I heard there are large pearl shops in Shanghai and Beijing. China is a large producer of freshwater (or sweet water) pearls.
BONUS QUESTION. A counterfeit is an imitation that is made usually with the intent to deceptively represent its content or origins. The word counterfeit most frequently describes forged currency or documents, but can also describe clothing, software, pharmaceuticals, watches, or more recently, cars and motorcycles, especially when this results in patent infringement or trademark infringement.
A knockoff is a copy that sells for less than the original; broadly : a copy or imitation of someone or something popular
Rob . . . I saw the same 60-Minutes segment, and while the fake Callaways might have been hard to detect by an untrained eye, they were definitely inferior and sub-performing products. By the way, there are several "pearl markets" in Beijing, and our local liaison/interpreter, Grace, should be able to help us find some good deals!
1. China risks credibility by continuing to allow/ tolerate violations of property rights. The money lost by huge companies will not help China’s reputation. This is especially true if China wants to continue to rise in becoming a world power in all aspects of the idea. However, the basic principles of communism indicate that one of the goals (of communism) is to create a higher social order that allows all to be shared by everyone. In a perfect world and with perfect ideals, products would not cost more, in excess, because of their names. This is a very optimistic outlook, I know, but it's a thought that continues back to the basis of Marxist Communism in which, ultimately, the poor will overcome.
2. As was already said, world companies and businesses still turn to China, probably because of the available labor. Not only are there a lot of workers; but the cost of labor is also extremely inexpensive. Also, China does continue to gain power on a worldly scale. This could influence businesses. It almost appears necessary to survive as a business to work with China. There are so many potential buyers and workers that it seems almost impossible not to ignore China. I caught the end of a special on the Discovery Channel discussing business and relations with China. I was shocked to see that WalMart was a big name in China. Although the store contains a mixture of Chinese and American items, it is considered a specialty store, whereas here, some would never consider a specialty store anymore than Stop & Shop.
3. Honestly, I am excited to see the items on the streets of Beijing. Although illegal, I do not see a huge problem with browsing or even buying some of the items. It does take common sense when deciding how much to actually pay or reviewing the quality of an item. But, the items are obviously fake because they are being sold at such a low price and this should be considered. The real designer items are expensive and sometimes out of reach, this is an opportunity to decide if it is worth it to save or to buy the cheap alternative.
Bonus: A counterfeit good is a “fake” item with the name of the real item. A knock-off mimics the real item but does not use the same name.
The current issue of Time Magazine has an article that addresses what we're talking about here . . . in a nutshell, whether China will play by the rules that govern the rest of the industrialized world. You can check it out at: http://www.time.com/time/magazine/article/0,9171,1826273,00.html
Even though Wal-Mart and other iconic American brands have set up shop in China (as you will see in McDonald's, KFC, Starbucks, etc.), the US trade deficit with China is inching toward $300 billion! Is part of the reason that Chinese consumers aren't buying as much from the US is because they are not paying the premium attributable to intellectual property rights, whether for software, movies, music, and other creative endeavors?
1. China’s approach to manufacturing and labor has always been to be the leader in cost. China has the cheapest labor and also produces some of the cheapest products because of this. The products in China also have a tendency to be counterfeit which lowers the cost of that product even more. I feel as though because of these business practices people think of Chinese products as less expensive and not high quality. By counterfeiting and disregarding international standards of fair business trade China is putting themselves out their as “the bad guy.” They will be taking business away from other countries that produce real high quality products. Consumers as well as business people will not trust Chinese products which could ultimately hurt their economy. China continues to have extremely cheap labor and can keep their economy going by making foreign high quality, real products.
2. Cheap labor, cheap labor, cheap labor! Like I said before China has very cheap labor which makes businesses want to move their companies over to Asia. It saves the foreign companies so much money because there are so many people who live in China and so many people who need jobs. They don’t care how much they get paid because it is really the only job they can get or even find. Therefore the foreign companies can pay the Chinese people practically nothing to do manufacturing and other labor jobs. I personally think it is wrong for these companies to do this. It is almost as if they are taking advantage of the Chinese laborers.
3. Personally I would buy these counterfeit products. Even though it is unfair to the real companies who manufacture these products what average consumer wouldn’t buy them? If they look and feel exactly the same but are cheaper it is almost a no brainer. Its people like me who keep these unfair business practices alive but for a consumer with a budget, who can spend $3000 on a brand name bag, it is a really good deal. And I do plan on buying some while I am there :o)
QUESTION 1.
China can tolerate being the worlds “capital of counterfeiting” because they are such a successful country on all other fronts. China is capable of producing so many counterfeit products because they are so successful in production. There are probably more counterfeit products out there that have been produced by the Chinese that we will never know about and it wont hurt chinas production of these products unless we know about them. China risks the acceptance and business partnerships with other countries by continuing to producer counterfeit products.
QUESTION 2.
I think so many countries are eager to do business with china because they are so largely successful and the main source behind the world’s production. Plus labor and production is so cheap in china that other countries will save money by doing business with china.
QUESTION 3.
I’m not going to lie, I’ve bought designer bags and stuff for way cheaper than they should have been. Either they were fake or definitely counterfeit. I definitely don’t agree with stealing products and selling them to make money but I also never really thought about it when I buy certain products where they are really coming from. I will definitely be more cautious of purchasing these items while we are in china though.
BONUS QUESTION.
The difference between counterfeit goods and knock offs are for example a counterfeit coach purse could have the coach labels on it and the same design as a coach bag but be priced much cheaper where as a knock off would be a similar pattern as a coach bag but instead of a C it would have a G. Things along those lines are what separates a knock off and a counterfeit.
1) China is different from the rest of the leading global citizens in that it is not westernized and it is communist, although Russia does have its ties, it is claiming to be "democratic" now. China tolerates the violations of intellectual property rights because those violations make a lot of money for the country. China does not have as high of a sense of legality as the western world because of its different culture and beliefs, so therefore it does not always view the violations as outright stealing. By continuing to steal however China risks losing its respect and spot among the world's leading nations because others nations are growing weary of trading with China due to the many intellectual property violations. If China was to loose out on trade, that would greatly hurt the country's gdp and reduce its status among the leading nations.
2) So many foreign companies are eager to do business with China strictly because of the financial aspect. China offers many products that are extremely cheaper in costs which therefore help these companies maximize their profits by getting the same product for a fraction of the cost. China's lack of regulation also offers something else that many of the other leading nations do not; a large workforce that is willing to work long hours in flithy and unsafe conditions for basically only a few cents a day. Companies choose to have their factories in China because once again, the cheap labor helps their maximize profits.
3)I think you know what you are getting when you buy counterfeit, you are getting a product that may look a lot like the real deal however quality wise, the product is not as good. You may also get the product for a fraction of the cost however that product may not last as long or be as nice as the real product.
Bonus) Counterfeit goods are illegal and exact copies of the product while knockoffs are similar but not exact.
1) China is different from the rest of the leading global citizens in that it is not westernized and it is communist, although Russia does have its ties, it is claiming to be "democratic" now. China tolerates the violations of intellectual property rights because those violations make a lot of money for the country. China does not have as high of a sense of legality as the western world because of its different culture and beliefs, so therefore it does not always view the violations as outright stealing. By continuing to steal however China risks losing its respect and spot among the world's leading nations because others nations are growing weary of trading with China due to the many intellectual property violations. If China was to loose out on trade, that would greatly hurt the country's gdp and reduce its status among the leading nations.
2) So many foreign companies are eager to do business with China strictly because of the financial aspect. China offers many products that are extremely cheaper in costs which therefore help these companies maximize their profits by getting the same product for a fraction of the cost. China's lack of regulation also offers something else that many of the other leading nations do not; a large workforce that is willing to work long hours in flithy and unsafe conditions for basically only a few cents a day. Companies choose to have their factories in China because once again, the cheap labor helps their maximize profits.
3)I think you know what you are getting when you buy counterfeit, you are getting a product that may look a lot like the real deal however quality wise, the product is not as good. You may also get the product for a fraction of the cost however that product may not last as long or be as nice as the real product.
Bonus) Counterfeit goods are illegal and exact copies of the product while knockoffs are similar but not exact.
Question 1)
Well, I think the only reason why China has the opportunity to counterfeit is because of how most products are produced in China. A prime example of some of the ways they counterfeit is producing fake alcohol. Since the bottles are produces in China, many places will just add fake alcohol in the bottle and sell it at retail price. I hate the fact how they are growing so fast and neglect international standards, but many countries depend on China’s labor. I do not know if this is true so don’t quote me on this, but many expats who have been living in China say products such as Nike in the silk market (which is counterfeit central) may actually be real. They say that they will just keep producing products after the time they are suppose to and just sell the merchandise very cheap. In general, the silk markets where you can bargain are cover with counterfeit products and will be looking to take advantage of foreigners during the Olympics.
As far for the lack of respect, many countries will not buy the products if they find out it is a fraud. I think the only people who will have to worry about the counterfeits, is the people who buy the products around China, rather than the big companies that spend millions of dollars.
QUESTION 2.
Plan and simple – Labor is very inexpensive meaning companies can make more $$$$. Many companies want to get involved with the Chinese market hoping that it will lift their company to increase revenue. China is the new hotspot, so looking past the counterfeiting aspect, what is the big deal then. Also, land is very inexpensive at the moment so the real estate market is in its prime. Buildings are being put in every little location which will soon enough add another ring to Beijing. Right now, China has 5 rings, but is in the process of completing the 6th ring road.
QUESTION 3.
I actually do not mind as much seeing how I have been here and have purchased some products. At the moment, I have purchased Oakley sunglasses, Oakley backpack, Polo sandals, and small presents for friends and family. Many of the products are decent quality, but beware in what you purchase because it could only last weeks. What amazes me the most is the ability China has to produce fake iPhones. The only thing I recommend is to go for a ¼ of the price because if you pay for half of the product, then you got ripped off. Another note is if you know your product well and you realize (for example) the polo player is on the opposite side of the shirt, then do not buy the produce.
BONUS QUESTION.
Basically, counterfeit is products that are almost impossible to tell the difference from a fake product of not. Often times the product will look exactly the same, but might have been made from different material. Knock offs are products that are similar to each other, but the knock off will have a different name on it. Example would be purchasing a Polo.com shoe rather than a Polo shoe.
1. Many products are made in China this allows them to be able to make more counterfeit products. Also there are many people out there, myself included, that do not mind buying a counterfeit or fake purse at a cheaper price than the real one. So regardless China is still making money and a profit off of the goods. This does cause a lack of respect for China from other countries but the fact of the matter is there are still major companies that are producing there products there because it is cheap labor, and will continue to do so.
2. Again it is the cheap labor that brings many businesses to China for production. This causes an increase in profits for the companies, which is a benefit. Many companies have stopped producimg some of their products in China because of all the recalls that have been occuring with childrens toys. But there is still a large enough market out there that still produces products in China.
3. I think that the counterfeit or knock-off products are taking away from the actual company, just like pirating of music on the internet. But it is also nice to get a designer bag that looks almost exactly like the original for a fraction of the price.
Bonus- counterfeit is a product that looks almost identical to the real one and is intended to fool the buyer, and a knock off is a known fake and generally the name on the bag or logo for the company is changed.
Just like Bush said about Americans being addicted to oil in his 2006 State of the Union address, we are also a nation enamored with cheap prices for consumer goods. And if the "honest Abbys" in our class are indicative of general consumers, then don't we collectively fuel China's economy steeped in low-cost and phony goods? So as Lauren stated and I imagine most would agree . . . while it is immoral for Chinese companies to subject their employees to barbaric work conditions and pay unfair wages, we -- perhaps unwittingly -- keep the status quo propped up with our insatiable appetite for all things cheap. The point is that it is not only about China and its labor and trade policies, but also about the US as a consumer nation. Food for thought. Ashley observes that the Chinese government turns a blind eye to IP abuses because the production and sale of pirated or fake goods generates billions of dollars in revenue that drives up its gdp (and importantly, the government's tax coffers!). Ashley also said that cultural differences could explain the divergence between ethics and legality as compared to Western practices. She also noted that China's lax regulatory oversight creates a more business-friendly environment, even though -- as Jake, AJ, and Jenn mentioned -- this creates a risk buying and using unsafe products. AJ's first-hand experiences in Beijing's street markets should be instructive to the rest of us!
I feel that reason that they allow a the intellectual property violations because for so long they tried to isolate themselves from the rest of the world. This is also away that may people can escape poverty which is a problem so the government could possibly turn a blind eye. They re risking the respect of other nations, for many years Chinese citizens have been the victims of sweatshops, and now they are becoming the "bad guys." I feel that if these practices continue at a similar rate countries will stop trading with China or releasing their products to China.
Doing business with China can open a vast market for companies. If they could sell there products to the Chinese public it could greatly increase sales. Also the labor market its massive and labor is cheaper than in many other countries. Basically many companies are looking at their bottom line first.
I feel that we get what you pay for. I am going with an open mind that items i am purchasing could be fake. It is part of buying from not official carriers.
1.The thing that China will lack is the people wanting to work over there and wanting to work for the compaines that connect with China there work habit. They have a chance to be red flagged and that is not good for any companie and there ways of business
2.People want to do business with that companie because they are cheep busniess and ways to get there product done for less while they make more profit.
3.I dont care about the conterfit product where the buyer beware to the product lets the constomer get the products they want a the price they believe is worth it... thats why i dont mind it cause the constomer rules the price not the companies...
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