China's Market For Counterfeit Goods

China’s Market for Counterfeit Goods

  “Who would be dumb enough to buy the real thing? Look at these!”  my peers 

and I exclaim as we sift through mountains of flawlessly imitated Louis Vuitton and 

Prada wallets and handbags. “The real thing would have cost a fortune!”. We are in one 

of Shanghai’s biggest hubs for fake goods, The Underground Market, located in the 

subway station beneath the Shanghai Museum of Science and Technology. Aisle after 

aisle of vendors beckon eager shoppers to follow them in promise of the highest quality 

bags available. Those brave enough to explore what these peddlers have to offer often 

find themselves standing in awe as the man or woman pushes against a portion of the 

wall that appears to be like any other, covered in fashionable totes, leading to a hidden 

showroom of shockingly convincing knockoffs. Just a few weeks ago I found myself in 

this position, as well as grappling with so many pressing questions about these 

businesses and their merchandise. Where do these come from? What makes them so 

different from the real thing? How dangerous is this line of work? Thus was introduced 

to me my topic of discussion. 

I will admit, going about this particular topic was no easy task, mostly because 

those who know most of this line of work are the ones actively doing it. And these 

businesspeople speak English that is limited to “best price”, “high quality”, and “very 

beautiful”. Three weeks ago, a friend and I took to the Underground Market in search of 

nothing too particular, but what we found was nothing sort of amazing. A simple clothing 

rack containing streams of beautiful color, unmistakably dresses designed by Herve 

Leger, a prominent women’s fashion designer whose dresses sell for two to seven 

thousand dollars a pop. As we buried our hands in the beautiful, thick fabrics, we met 

Mary, the operator of the shop. “Anything you want made, you send picture to me and I 

will give it to the factory.” This seemed too good to be true, especially considering these 

dresses were selling for about seventy five US dollars a piece. I implored, “Where do 

you get these dresses, and how are they so similar to the real thing?” They even had 

the authentic Herve Leger tags sewn into the back. “I have a factory” she said, “We use 

high quality fabrics and customize any order.” She showed me emails from people all 

over the world requesting that these dresses be made and shipped. I was in total shock 

at the normalcy that she greeted her line of work with. After all, she was taking part in 

something illegal that could land her in heaps of trouble. 

           As I started to bid farewells to my newest friend, I noticed a shift in the energy of 

the marketplace. Shopkeepers started to shuffle about their posts, rearranging things 

and tucking items in corners, some even closing their doors. I had a feeling that some 

sort of inspection was taking place, and in a way I was right. Uniformed men strolled up 

and down the aisles with stern expressions, bringing the bustling energy to a quiet buzz.   

We went about our business of browsing, but then gained a curiosity as to what was 

going on. I found answers with Rory McBride, a project manager for Shanghai Zhenhua 

Heavy Industries, whom I met at a cocktail party. He told me, “Anything you want you 

can find here. The things China does with these goods is amazing. Its all too common to 

see police go in and raid some guy’s stand and take him away in handcuffs.” The only 

question that I had that I couldn’t seem to find an answer to was the penalty for this 

crime. However, I do know that it’s taken much more seriously in the States. "The theft of 

intellectual property is a global problem and cross-border efforts are needed to fight it, 

robust enforcement of intellectual property rights allows innovators and creators - whether 

in a small start-up or an international corporation - to profit from their efforts and gives 

consumers confidence in the reputations of the products they buy." says Thomas 

Winkowski, commissioner of Customs and Border Protection.

  The next weekend, I returned to the Underground 

Market. This time, I learned just how vast the variety of counterfeit goods was apart from 

bags and dresses. Technology is an enormous part of China’s knockoff empire. In 

numerous windows I spotted high-end headphones, MP3 players, even Apple products. 

I decided to further investigate by questioning a shop owner who only gave me the 

name “Jesse”. “Where did you get this?” I asked “Who made this for you?”. “Genuine 

Apple product!” he said. I repeated my question. “Lady, genuine Apple product for you!” 

This conversation was going nowhere fast, but I did gain from it the notion that the 

counterfeit goods in China have taken a much broader array than I could have 

expected. 

          Deborah Charles, a writer for Reuters.com, claims “China is the primary source of 

counterfeit and pirated goods in the United States and accounts for 72 percent of all 

seizures relating to intellectual property rights, according to the U.S. agency's fiscal 2012 

statistics.Theft of intellectual property rights costs U.S. businesses $320 billion a year, 

equivalent to the annual value of U.S. exports to Asia, according to a report by the 

Commission on the Theft of American Intellectual Property, a group of former U.S. 

officials.” 

From this research, I’ve concluded that although it’s rather intriguing to know you paid a 

fraction of the cost for a close-to-identical product, the risks that surround this business are 

no joking matter. Although China is currently the mecca for all things counterfeit, I’d bet 

money on the idea that we’ll see a strict reinforcement within the next ten years. Shoppers 

may relish in the availability of these goods, but the repercussions of transporting them 

home to the states just might outweigh that faux Chanel handbag.