China cracks down on "black economy" (12/21/01)

2004-06-12 15:16

The Chinese government is launching a campaign to crack down with an iron hand on counterfeiting, the "black economy", one of its commitments to the World Trade Organization (WTO).
Hundreds of thousands of law enforcers across the country are swooping on every illegal underground factory and counterfeit operation and those connected with medicine, foodstuff, agricultural materials and assembled automobiles are the main targets of the campaign.

Armed police officers are inspecting highways to block counterfeit cargo being transported in disguised military vehicles.

Commodities inspections and quarantine drives at ports are being tightened up to ensure substandard or counterfeit goods are not being exported.

"The Chinese government is a responsible government. We are capable of and confident with our ability to solve the counterfeiting problem," said Li Chuanqing, deputy director of the State Administration of Quality Supervision and Quarantine.

The official stressed that the crackdown on the "black economy" is a huge long-term task for the government, and efforts will be made to keep the campaign going steadily.

Li said that the government will pay more attention to product quality during the Tenth Five-Year Plan period (2001-2005). It is determined to support the development of famous brand products which are competitive and popular.

The government will insist on improving product quality as well as cracking down on counterfeiting, he said.

As an important step in the campaign, governments are improving their information network and a black list of counterfeiters will be available to law enforcers across the country to assist with monitoring and prevention of counterfeiting.

Law makers have revised laws related to the punishment of counterfeiters. The revised laws include "the Patent Law", "the Trademark Law", and "the Pharmaceutical Administration Law" which have been in operation this year.

The Supreme People's Procuratorate and the Supreme People's Court have published the latest information on the practical use of the law in cases related to counterfeiting so that it can be used in lawsuits against counterfeiters.

On December 11, China officially became a member of the World Trade Organization (WTO). New Year's Day and the Spring Festival (Chinese Lunar New Year) in the past have been best times for counterfeiters to make their illegal profits.

A secret factory counterfeiting the US brand-famous medical bandage "Band Aid" has been discovered and closed down in Shangrao City in East China's Jiangxi province.

The factory facilities, raw materials and 316 cases of fake goods worth 560,000 yuan (US$67,700) were confiscated.

Authorities said that it was the country's largest secret factory counterfeiting a single product in the country.

However, this is only one success in an ongoing campaign. In the past month, the State Administration of Quality Supervision and Quarantine has closed down a total of 1,090 secret factories and settled 13,000 cases dealing with counterfeit goods.

Counterfeiting not only harms the public, but also spoils the country's environment for attracting foreign investment.

"Counterfeiting has dampened the enthusiasm of foreign investors in China," said Ding Yinglie, a professor at the prestigious Qinghua University.

A Shanghai-based American-funded company claimed in a report recently that counterfeiting has annually brought about a loss of 350 million yuan (US$42 million) to the company in recent years.

Wang Jun, a professor at the University of International Business and Economics, said that China's iron handed crackdown on counterfeiting will not only protect the public interest, but also create fair competition and a healthy economic order for China with the largest market in the world.

China's crackdown on counterfeiting has been highly praised by foreign investors.

"We welcome the Chinese government's unremitting efforts in cracking down on counterfeiting to protect the legal rights of famous brand names," said Zhong Zhefu, chairman of the Quality Brand Protection Committee under China Association of Foreign Funded Enterprises.