China’s economic revival is minted in counterfeit

LETTER FROM CHINA
Copyright The International Herald Tribune
By Howard W. French
August 3, 2007
SHANGHAI: What is there to say about a country where something masquerading as the newest Harry Potter book comes out on the market 10 days before the genuine item?
I’m talking about a country where unauthorized versions of each book in the series exist in both English and the local language. A place where the rush to cash in on something commercially popular has seen a proliferation of wholly “original” Harry Potter books, tomes with titles like “Harry Potter and the Big Funnel,” and “Rich Dad, Poor Dad and Harry Potter,” that are more numerous even than the originals themselves.
That country is, of course, China, a place where no commercial stone seems to go unturned, whether that means refilling plastic bottles and selling them as mineral water, or ginning up reasonable facsimiles of Apple’s popular iPhone and selling them on street corners, or even pushing fake blood products into hospitals.
One must begin with the obvious. China has a weak regulatory system, where scammers and flimflam artists and hard-working entrepreneurs, both ethical and not so ethical, contend in one gigantic scrum.
This often reminds me of the scene of the drifting salesman in the 1970 Dustin Hoffman film “Little Big Man,” who gets tarred and feathered for selling what amounts to snake oil. The problem is that until recently, when a stink was raised among China’s rich trading partners about product safety issues, there was scarcely any risk of being tarred in China’s freewheeling markets, where just about anything can be sold for the right price.
This picture presents the outside world with one of the central paradoxes of contemporary China. It is a country with a steely and determined brand of authoritarianism that aspires to be in total control. At the same time, as with product safety problems or intellectual property issues, the government is much like the greyhound on a racetrack chasing the mechanical rabbit. Reality exceeds its grasp, and there is no hope of catching up.
Since the Deng Xiaoping era, China’s watchword has been getting rich. In practice this has brought dramatic results, lifting hundreds of millions of people with unimagined speed, propelling China to the first rank of world economies and creating a large and fast-growing middle class where none existed before.
It has also led to a ravaging of the environment, stark social inequalities, a looting of the public treasury by corrupt officials, and perhaps most dangerous of all, an explosion of an old ethical order that bound this country together. Life in China today often seems purely situational, not governed by rights and wrongs so much as by what one can get away with.
As vital as it has been to national revival, Deng’s dictum is also a key to understanding the widespread culture of industrial counterfeiting and fraud in China. The dirty little secret here is that these practices have thrived in significant part because city, county and provincial level governments have found it convenient to have things work this way.
When the least protest arises on the streets of Shanghai, the police turn out in force to clear the streets and arrest the demonstrators. How else to explain that the main streets of the central city here teem with people flogging counterfeit goods of every description, rarely provoking even a raised eyebrow from the authorities?
When growth is elevated to godliness, it is the froth in the economy and the jobs that it creates that count most, not niceties like intellectual property or fussy product safety details.
Another Deng dictum, less celebrated, but arguably just as important in terms of China’s current problems, was “no debate.” The lack of vibrant civil society, the existence of a weak and corralled press, which easily succumbs to analyzing questions in national terms rather than rational ones, is a heavy weight for any developing society to bear.
I have searched in vain for signs of a serious, sustained discussion of counterfeiting and intellectual property violations in the Chinese press. Yes, there are occasional statements to the effect that intellectual property must be respected, but few have bothered to take a close look at the problem, to acknowledge its extent in China or vigorously debate its consequences.
If the government, with its weak regulatory enforcement and conflicting priorities and a press which finds it unnatural and sometimes dangerous to engage in searching, critical appraisal of the society’s problems are the most obvious elements in this puzzle, what is the final piece?
The answer seemed to come in the form of a long letter from a reader who wondered why there was such a fuss about a proliferation of Harry Potter knockoffs in China. After all, the reader wrote, this “is an old story that Western media has tirelessly elaborated on for years.”
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