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Piracy still strong in Beijing markets, despite IPR deals

Customers look at a fake Gucci handbag in Beijing's famous Silk Alley market on Saturday. Fake bags and other goods can are still on sale in Beijing's markets despite China's recent agreement not to sell fake versions of big brand-name products. PHOTO: AFP

In the crowded hallways of Beijing's famous Silk Alley market, a vendor brazenly pulls out a folder displaying color photos of fake Louis Vuitton and Gucci bags for sale.

"Just like the real ones," the vendor promises as she points to bags that cost the equivalent of between US$75 and US$100, then offers lower quality versions for around US$20.

The potential sale took place last week, a day after Silk Alley and other major Beijing markets signed an agreement with big-name international brands including Louis Vuitton and Gucci not to sell fake versions of their products.

Under the agreement, the markets pledged to enforce a "two-strike" policy in which they would evict vendors who continued to sell those products after receiving one warning.

It was the latest in a seemingly endless stream of announcements by Chinese officials of crackdowns, laws and other actions to rein in the nation's counterfeit industry and mollify China's international trading partners.

The US has been a particularly sharp critic of China on piracy, charging Beijing is not doing enough to combat the problem that is costing US companies tens of billions of a year.

EU Trade Commissioner Peter Mandelson, who oversaw the signing of the markets agreement during his five-day visit to China, hailed it as a sign that progress was being made.

"This initiative is highly significant and should be an important step to maintain confidence in these markets. I hope we can build further on this foundation," Mandelson said.

Nevertheless, the sheer variety and accessibility of fake products at Silk Alley and other markets around Beijing raise questions about how willing and effective the government really is in regards to stemming piracy.

In Alien's Street, another famous market that is particularly popular with Russian customers, US$10 can buy a fake Gucci watch, a knock-off Vuitton handbag or even a copy of Van Gogh's famous painting Sunflowers.

A watch vendor said that most of the customers were foreigners, mainly Russians but also Malaysians, buying products in bulk to sell in their home countries.

"We deal in wholesale. It's the only way to make money. They are almost all repeat customers," she said.

At the Chaowai Men market next door, an enthusiastic store manager hawked fake wallets bearing imprints of popular, but not the biggest, brands.

When asked about "A" goods, the woman lifted a white curtain hanging on one wall to unveil a shelf lined with wallets carrying the logos of Burberry, Chanel, Gucci, and Louis Vuitton. The sales vendor eagerly explained that the simple, zippered wallets with the classic LV monogram logo, at a price of around US$7, were among her most popular items.

Products that were conspicuously absent in the markets were those related to the 2008 Beijing Olympics, of which the government receives a share of the sales revenues.

While Chinese authorities are seemingly incapable of stopping the flagrant sales of other fake products, they have warned that counterfeit Olympic products will not be tolerated and traders appear to be aware of the limits.

At Alien's Street, vendors shied away from inquiries about Olympics merchandise.

"Hardly anyone dares to sell [Olympics merchandise] without a license," said one man who was selling mobile phone ornaments.

Gao Shangtao, a Beijing-based Chinese lawyer specializing in commercial law, said China already had the laws to effectively fight counterfeiting, but enforcement was the main problem.

"The central government is very determined to strike against copyright violations. [But] on the local level, officials act on behalf of area economic interests and protect the copyright violators," Gao said.

Nevertheless, Gao said China was making some progress, citing the fact that there were an increasing number of intellectual property rights cases appearing in the courts.

There were also embryonic signs of vigilance against fake products at Silk Alley.

"There are regulations about which brands we cannot sell. All the big names, like LV or Prada, are not allowed," a 23-year-old sales attendant surnamed Wu said.

"Inspections are more frequent now. Once they find that you are selling, they confiscate the goods and then fine you," Wu said.

But when asked about the rows of fake Ralph Lauren Polo shirts on sale at her stall, Wu replied: "No one comes and checks these brands, so we still sell them."
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