Fake Stuff

China and the Rise of Counterfeit Goods

Yi-Chieh Jessica Lin

• Publisher: Routledge
• Year: 2011
• eBook ISBN: 9781136817533
• Topic: Social Sciences
• Subtopic: Cultural & Social Anthropology
• Index: Social Sciences

"The Anthropology of Stuff" is part of a new Series dedicated to innovative, unconventional ways to connect undergraduate students and their lived concerns about our social world to the power of social science ideas and evidence. Our goal with the project is to help spark social science imaginations and in doing so, new avenues for meaningful thought and action. Each "Stuff" title is a short (100 page) "mini text" illuminating for students the network of people and activities that create their material world.

Yi-Chieh Lin reveals how the entrepreneurial energy of emerging markets, such as China, includes the opportunity to profit from fake stuff, that is counterfeit goods that rely on our fascination with brand names. Students will discover how the names and logos embroidered and printed on their own clothes carry their own price tag above and beyond the use value of the products themselves. The book provides a wonderful introduction for students to global markets and their role in determining how they function.

1
INTRODUCTION

On a hot and humid summer day in 2006, the Xiangyang Market offered up hundreds of outdoor stalls and “brand name” goodies: Louis Vuitton wallets, Gucci monogrammed handbags, and Prada key rings neatly lined rolling carts as vendors yelled loudly, “Good stuff here, you should take a look!” Only in the 2008 Beijing Olympics closing ceremony would one find a place so densely packed. Non-Chinese customers were the majority, some of them carrying large suitcases behind them to accommodate their “souvenirs.” Inside those cases were bags, scarves, watches and other goods—a potpourri of local market commodities with global cache.

A young vendor named Jiaming Chen beckoned customers to inspect his goods: “Feel free to take a closer look and touch any of these wallets or bags … I have more in the back.” Jiaming, who appeared to be in his twenties, wore jeans, a black rock ’n’ roll T-shirt, and a pair of old running shoes. His hair, dyed blonde, contrasted sharply with his dark black eyebrows. “How much is this Louis Vuitton wallet?” A customer asked. “RMB 100,” Jiaming replied. The customer put it back. “What about 80?” Jiaming offered. “Wait. Let me get some better stuff from the back. Don’t leave.” Within seconds, Jiaming disappeared into another room, reappearing with four wallets of a different style. “These are all ‘double A’ quality goods that I am selling at RMB 80 each,” he declared.

In the end, the customer walked away. But there would be many more customers on this hot summer day. And their only shelter from the sun on this day and others would be under the shadow of two trees, between which hung a red banner with large white Chinese characters that read, “Our mission is to knock down counterfeit goods and protect intellectual property rights.”

Counterfeit Culture

Xiangyang Market used to be a novelty for tourists from around the world. It was first opened in 2000 in downtown Shanghai as part of a plan by the Municipal Government to boost the city’s economy. Today, relocated and renamed the Xinyang Market, it is one of many counterfeit markets in China. Counterfeit markets, of course, blossomed before China’s economic liberalization, when goods were not easily accessible to China’s consumers under the formal and tightly regulated economy. But in contemporary China, counterfeit markets have expanded in scope and size. Whereas authentic brand name goods are delivered to state-owned or foreign-owned stores through formal channels, counterfeit goods flow into open-air wholesale markets located in densely populated areas that can be easily accessed by public transportation.

Though they operate above ground and quite visibly, these markets occupy a kind of “gray zone” between the formal and informal economy. In these gray zones, the “fake” outstrips the real, and questions of authenticity are routinely destabilized and even made arbitrary. These grays zones and this burgeoning “fake” culture have become fodder for artists and politicians alike. In 2007, curator Pauline Yao of Universal Studios, Beijing hosted an art exhibition with counterfeiting as its theme. The exhibition, entitled “Forged Realities,” featured ten young, avant-garde artists from around the world and tackled the distinction between fakery and reality, truth and fiction, fact and fantasy.¹

In 2008, the Brooklyn Museum featured more than ninety works of Takashi Murakami, the designer who collaborated with Louis Vuitton. In the exhibit, Murakami displayed his bags for Louis Vuitton as if they were for sale on Chinatown sidewalks. The display was named “Monogramouflage” and was designed to bring attention to the rise in Louis Vuitton counterfeits.² And in Dafen Village, Shenzhen, China, over 8,000 painters, artisan–painters and apprentices are working to produce commissioned paintings of Western masterpieces (e.g. Van Gogh).

Fake stuff is possible, of course, only in an economy in which, for many products, their most important feature is their name. When people buy Coca-Cola, they are not buying only colored, sweetened water; they are buying a Coke and all the meaning and symbolism that have been constructed around the name. In the case of Coke, as with many other products, their value comes not from creating products, but creating consumers for specific brands. Consequently the value of the sign, that is the logos and brand images, is far greater than the material product itself, be it a soft drink, sneaker, shirt, or handbag. Thus a cell phone made with pennies in Asian factories sells for dollars of symbolism created through design, branding, and advertising (see Foster 2008: 76).

In fact, the Coca-Cola corporation considers itself a marketing company, rather than a soft drink manufacturer and historically, rigorously guarded itself from companies calling themselves Coa-Kola, Coke Ola and Koke Company of America. Their efforts resulted ultimately in a U.S. Supreme Court ruling in which Justice Oliver Wendell Holmes, writing for the majority stated that “the name [Coca-Cola] characterizes a beverage to be had at almost any soda fountain. It means a single thing coming from a single source and well known in the community” (see Foster 2008: 79).

But since the price of things may include the cost of the name, counterfeiting has become a cultural touchstone as consumers seek the symbolism of the brand, without having to pay its cost. In Mandarin Chinese, counterfeit goods are known as jiahuo, kelong or fangmaopin. Jia and fangmao are both expressions for “counterfeiting”; huo and pin are both expressions for “goods.” Kelong is a transliteration of the English word “clone.” Another term for counterfeit good is shanzhai, which literally refers to “mountain fortress” and figuratively refers to bandits in mountain hideaways taking potshots at the established giants in Robin Hood fashion. There are many categories of shanzhai products, ranging from food, fashion accessories, clothes, perfumes, flat tires, aircraft parts, automobiles, medicine, watches, purses, tea pots, money, MP3 players, flat-screen computers, and cellular phones to amusement parks. Time Magazine even produced a list of top ten Chinese knockoffs: Hi Phone and Aphone A6, iPed, Goojje, Nat Nat Shoes, Shanzhai Street, China’s White Houses, China’s Next Top Model, Shanghai’s World Expo Song, China’s Fine-Art Factory, Huanhai Landscape VA3, and Lifan 320 (Bergman 2010).

In 1949, after Chiang Kai-Shek’s Kuomintang (Chinese Nationalist Party) retreated to the island of Taiwan after their defeat by the Communist Party of Mao Zedong at the conclusion of a bitter 30-year-long civil war, many former entrepreneurs of Shanghai fled to Hong Kong, where they started new businesses. Local imitations of these newcomers’ crafts appeared in the late 1940s and 1950s. Shanzhai referred to these local imitations, which involved three to five workers from the same family who composed unauthorized products to sell. Gradually, the term evolved to refer to homemade and counterfeit products. In January of 2009, Google published its annual rankings of China’s new hotwords. Shanzhai ranked the first.³

Some studies suggest that the prevalence of counterfeiting in China can be attributed to a cultural tradition that emphasizes memorizing literature word by word in traditional education. Others traced back the emphasis of good forgery as a criterion for good calligraphy to the Sixth Dynasty. Ultimately, however, much of the counterfeiting can be attributed to China’s emergence in the past thirty years as a world economic power. In 2010, China became the second largest economy in the world, after the United States. After the victory of the communists over the nationalists in 1949, China instituted a Marxist, state-run economy. But after various economic and social upheavals, in 1992, Premier Deng Xiaoping advocated for a total market economy during his itinerary to southern China and accelerated the economic growth. Overall, the Economic Reform has helped reduce the poverty rate from 53 percent of the population in the Mao Zedong era to 19 percent in 1985, and 6 percent in 2001. But there are still significant differences in income between city and rural dwellers. According to the official statistics, the average annual income for a Chinese peasant in 2009 was $754, 41 percent of which is spent on food. The average annual income for an urban resident is higher: $2,514 with 36.5 percent of the income spent on food.

The switch to a more market-oriented economy unleashed enormous entrepreneurial energy, some of it directed toward producing counterfeit goods. Still, I focus on the production of counterfeiting in China because China’s counterfeiting operations are central to global debates over intellectual property rights. China is not the only place of counterfeiting production. My friend Kedron Thomas, a Ph.D. candidate in Anthropology at Harvard University, has conducted more than one year of fieldwork on counterfeiting in Guatemala. My other friends based in U.S. academic institutions have also engaged in research on counterfeiting in Brazil, India, Cote d’Ivoire, Indonesia, Macedonia, Turkey, Vietnam, and Romania. But China’s export might be the largest among them. I hope by focusing on the cases of Chinese production counterfeiting, we focus attention on the issue of business ethics and globalization. In other words, wars of intellectual property rights need to be understood in the context of corporate social responsibility, consumerism and the global economy.⁴

Intellectual Property Rights

China’s counterfeiting operations are central to global debates over intellectual property rights. The World Trade Organization (WTO) defines intellectual property rights as “rights given to people over the creation of their minds. Creators can be given the right to prevent others from using their inventions, designs or other creations.”⁵ This definition implies that an intellectual property right is an exclusive right, and this exclusive right is given by the state according to state law. Exclusivity grants that the holder of an intellectual property right can forbid other people from using the intellectual property.⁶ Any exploitation of the intellectual property rights without the owner’s permission constitutes infringement. The law does not require the owner to practice his or her intellectual property rights in order to keep them. Thus, to fully understand intellectual property rights, that is, how people can own ideas or symbols, we need to know a little about copyright law.

Intellectual property rights are often secured through a trademark. Trademarks, which consist of words, shapes, marks, colors, sounds, or some combination thereof, function as symbols of a certain brand. In China, Taiwan or the United States, once a trademark application is approved for registration in the trademark office, it is valid for a period of ten years. In the modern regime of intellectual property rights protect...

Table of contents

• The Routledge Series for Creative Teaching and Learning in Anthropology
• CONTENTS
• SERIES FOREWORD
• PREFACE
• 1 INTRODUCTION
• 2 THE STRUCTURE OF A COUNTERFEIT INDUSTRY
• 3 THE MARKET OF COUNTERFEIT GOODS
• 4 CONSUMING COUNTERFEIT GOODS
• 5 COUNTERFEIT CULTURE AS PROTEST AND REBELLION
• 6 CONCLUSION
• NOTES
• BIBLIOGRAPHY
• INDEX