By Mark Falanga
On a typical day in China, you can wake up and get your caffeine fix at a local Bucksstar Coffee House. Next, you can see if you want to buy a HiPhone 5 and the new book, Harry Potter and the Filler of Big. After all of that shopping, it’s time for dinner. You now have a choice between Pizza Huh and even Obama’s Fried Chicken.
In the business world, there’s knockoffs… and then there’s Chinese knockoffs that take the traditional American brand names and then change them ever so slightly in an unapologetically blantant way. While these produce humorous pictures, the American companies that they’re based off of surely aren’t laughing, especially if it eats into their profits.
It would seem that a business anywhere in the world wouldn’t be able to operate a business in this fashion due to copyright laws. So are they just more relaxed in China? According to a 2009 article in The New York Times, they are. In fact, the World Trade Organization, the overseer of global trade, of which China is a partner, found that the Chinese government has failed to protect the copyrights and trademarks on a variety of goods that are openly available to the Chinese population. The article then stated that the losses in sales from this lack of law enforcement have amounted to almost $3.7 billion.
The infamous “Obama Friend Chicken” establishment in Beijing, China, that since rebranded itself as “UFO.”
Photo courtesy of Wikimedia Commons.
So it would seem that the best way to stop this is to put pressure on China to toughen its stance on these copyright laws. Well, there are two problems with that. The first, and to most people, the most obvious, is the government of China is not easily swayed, especially by Americans. The second reason is that China secretly tolerates, and to some degree, celebrates this culture of pirated goods, which it has dubbed, “Shanzhai.”
The word “shanzhai,” when translated into English, means “mountain village.” It comes from a Cantonese slang word, which referred to factories in mountain villages that produce cheaply made, knock off items. The culture encompasses more than just the physical product; it can be referred to anything that is not official, but just has a grass roots backing behind it. For example, there is a Shanzhai Nobel Prize in China each year. Also, according to The Wall Street Journal, a man by the name of Shi Mengqi, staged a New Year’s Eve party that celebrated the Shanzhai culture with lookalike Hollywood celebrities and musical artists.
The problem in China is that this Shanzhai culture is booming, hence, more money is being funneled into these illegitimate factories, which as a result, can make better fake goods. To simply explain this, say you need a car and you want a nice, brand new Toyota Camry. Your first choice would be to go to a dealer. The car costs roughly $25,000, but your stress level of whether or not the car is genuine and will perform up to the standard of Toyota is very low. Assuming you have that money in your car fund, it’s a no brainer.
The second option is to go to a Used Car dealership on the outskirts of town. You see a Camry on the lot and the salesman quickly runs out and tells you that a little old lady who only drove it to church on Sundays owned this car. The price is only $5,000, not bad at all. You probably expect the deal to be too good to be true, but it doesn’t matter that much since you’re only spending a fraction of what the new car cost and if it serves you well for five years, so be it.
This third option, however, is rampant in China. You go to an auto dealer and see a Camry on the lot and the salesman says that the body has some dents in it so the price has been lowered to $14,000. It seems like a good deal, but is it really? Is the car new, used, or refurbished? Chinese companies like BYD (Build Your Dream) can keep the average consumer guessing. They replaced the sticker on car parts that they built with those of Toyota. Car companies have said it’s difficult to brand every single piece of a car they make, so it may be difficult to legally stop these Shanzhai factories. At a quick glance, it’s hard to tell from these pictures which car is real and which is the fake.
However, some feel this problem will solve itself. According to an article in Forbes Magazine, as China’s middle class flexes their economic muscles, they’ll want luxury goods. Already, most Chinese know the brand names and quality of Louis Vuitton and Gucci, so it seems as though it’s only a matter of time before brands like Arm and Hatchet baking soda disappear from Chinese shelves.