Imitation nation

Is piracy-crazed China a nightmare vision of the future, or just a developing country going through some severe growing pains?

By Lisa Movius

Jul 8, 2002 | In the shadow of century-old plane trees, art deco apartment buildings, gleaming A-grade office buildings and bustling department stores, they ply their trade. Seconds after you step off a bus, out of the subway or onto the curb a young man or woman sidles up to whisper, "Hello! CD? DVD?"

The stretch is found along Huaihai Road, as Shanghai's old Avenue Joffre has been called since 1949. Should you pay no heed to the whispers and continue on, they intensify into to a cacophony, as yet another salesman calls out the same refrain every few meters. Slip into the adjacent Xiangyang Market and the noise continues, only the mantra has diversified: "Hello! Prada?" "Hello! Rolex?" "Hello! Calvin Klein?" A dizzying array of products with Western brand names meets the eye, all available at impossibly low prices.

Places like Xiangyang Market, its Beijing equivalent Silk Alley, and similar retail centers in all of China's urban centers are hotbeds of pirated goods, but the trade is not confined to their boundaries. On every pedestrian overpass, subway stairwell or crowded street, there is at least one man, invariably middle-aged with greasy hair, opening a briefcase to reveal a selection of imitation name-brand perfumes. Next to him, resting on a folding chair, is the inevitable cardboard box crammed with pirated discs.

Mainland China is the piracy capital of the world. China's imitation industry feeds not just its own economy, but those of other nations as well; 46 percent of the pirated goods sold in America come from China, according to the International Intellectual Property Alliance (IIPA). The Quality Brands Protection Committee (QBPC), an anti-piracy body under the auspices of the China Association of Enterprises with Foreign Investment, claims that government statistics show that counterfeits outnumber genuine products in the Chinese market by 2 to 1. Pirated audiovisual materials occupy 95 percent of the market in large cities, and the proportion approaches 100 percent in the rural interior. Stricter laws have stemmed the tide only slightly, because anti-piracy law, like most of Chinese law, is enforced haphazardly at best, and everyone knows it.

Enforcement efforts are made even more futile by popular acceptance of piracy. Rising incomes have created an enthusiasm for foreign goods and brands, but Chinese consumers have become so accustomed to cheap, pirated goods that they are unwilling to pay full prices for the real thing. Traditional Chinese moral relativism combines with a modern sense of short-term opportunity cost and self-interest to justify what everyone knows to be wrong and illegal.

Piracy is one of the largest flies in the ointment of China's supposed economic miracle. Dollar figures for losses attributed to counterfeit goods are notoriously hard to pin down, but there appears to be little question that whatever the numbers are, they are big -- the Business Software Alliance (BSA) claims that software piracy in China alone costs the industry $4 billion a year worldwide. And while the multinational giants will hardly be sunk by piracy's encroachment on their profit margins in China, the situation is especially grim domestically. Piracy severely hampers the international competitiveness of Chinese companies, and the lack of adequate intellectual property protection dampens the impetus for local corporate, scientific and artistic innovation.

And yet, China's intellectual property mess isn't entirely bleak. Piracy may be bad for business, but it's great for consumers, and in some ways good for society. By providing small-business opportunities to the uneducated, unemployable underclass, piracy helps relieve China's mounting social unrest. The production of imitation goods, or "daoban" in Chinese, has become one of the country's major light industries, employing both the growing masses of workers laid off from state-owned industrial behemoths and the floating population of illegal migrant laborers.

Copycat publishing also serves as one of the only chinks in the armor of state censorship. Banned books, even a Chinese version of the scandalous "Private Life of Chairman Mao" and the works of Nobel Prize winner Gao Xingjian, can be found at pirated book vendors, usually operating from bike carts parked near busy bus stops. Films from the U.S. and elsewhere can take as long as three years to arrive at local theaters and even longer to come out on legal DVD. But illegal copies of Hollywood blockbusters appear in video compact disc format weeks after their release -- and sometimes they appear even before their release, as copies of promotional versions. Without piracy, the Chinese music scene would still be relying on home-copied cassette tapes and John Denver for inspiration, as it did in the 1980s.

In China, the forces of 21st century technology, consumer choice and pop culture are converging on a society struggling desperately to modernize, producing contradiction after contradiction. China in some ways represents a nightmare scenario for corporate America, a post-Napster Wild West chaos where any intellectual property can be illegally copied, and commonly is. But China is also emblematic of the growing pains of much of the developing world. Blame Confucius, blame Mao, blame Deng Xiaoping's trickle-down economics, or blame Western companies' unrealistic pricing policies: Imitation is a way of life in modern China, and it will take more than diplomatic pressure or a handful of laws to eradicate it.

Next Page: "Piracy sure beats manual labor"

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