Brand-new industry counterfeits big names

I don't know where Charlene Barshefsky bought the 40 Beanie Babies she acquired on one of her many recent trips to Beijing, but…

I don't know where Charlene Barshefsky bought the 40 Beanie Babies she acquired on one of her many recent trips to Beijing, but it could well have been at the stall between the belt shop and the Nike sports store in the Silk Market. The market is a maze of little outdoor shops conveniently located behind the US embassy for American visitors like Ms Barshefsky, looking for bargains.

Dozens of Beanie Babies of different colours hang from the stall and spill out of cardboard boxes on the ground. The soft toys carry tags saying "Copyright, Ty Inc., Oakbrook, IL., USA" and labels such as that on a "British" Beanie Baby declaring: "She's always sure to catch the tide, and wear the Union Jack with pride," or that on a toy with a dollar logo, which was signed, "Billionaire Bear".

Real collector's items, these, for adults in the United States and Europe who collect Beanie Babies and who pay hundreds of pounds for rare models. Except they are all fake. That is why they sell for about 75p each, a fraction of the cost of the real thing. One can be sure they are not legitimate as the Ty company has banned their sale in China.

Sometimes it's easy to tell what is pirated in the Silk Market, where almost all the "designer" clothes are either counterfeit or rejects from licensed factories. Items like Prada bags and Ann Taylor dresses are often very good imitations, though there are sometimes obvious clues. A silk shirt I bought yesterday (for £10) had a prominent "Gap" label saying: "Care instruction - hand wash cold", but the word "care" was spelt "gare" and "cold" was spelt "colod". Hmmm!

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It was not just the notorious Silk Market which the senior Communist Party official Li Ruihuan had in mind when he warned the National People's Congress on March 15th about "the phenomenon of phoniness which is rampant in our society today". All over Asia a counterfeit culture has taken root which officials find difficult to combat. I was discussing this with a friend the other day when he casually said the Marlboro Lights cigarette he was smoking was a fake. He could tell from the taste.

Mr Zhang Xuguang of the Municipal Tobacco Monopoly Bureau estimates that over one million cartons of phony fags entered the Beijing market last year. In November his officials publicly burned 500,000 cartons of Hilton, 555 and other famous brands, all counterfeit, much to the distress of watching smokers.

Nothing is safe from imitators who have successfully copied CDs, music, films, tickets, foodstuffs, drugs, pesticides, cars and electrical appliances. Joint-venture companies in the China Anti-Counterfeiting Coalition say that on average 15-20 per cent of products sold in China under their trademarks are false. Chinese cosmetics manufacturers have appealed to the government to crack down on counterfeit make-up which is hurting the industry's profits, not to mention the 200,000 women whose faces have been damaged by high levels of metals and bacteria in the last year. A major US manufacturer of mobile telephones estimates that 20 per cent of cell-phone batteries carrying the company's brand name in Beijing are counterfeit.

Sometimes even shops themselves are fakes. A store will open in a provincial town looking like one of a worldwide chain and will only be uncovered when a company executive stumbles upon it. This happened recently with DHL, the worldwide express service, which discovered that someone was using its name and logo in a southern city.

The Chinese authorities co-operate with companies when blatant cases such as this are brought to their notice. Government agencies will close shops, raid factories and steam-roller or burn fake merchandise, and courts have recently ruled in favour of Western and Chinese companies taking cases against imitators.

But it is like King Canute trying to stop a tide which reaches around the world. In the United States big consignments recently arrived from Taiwan of fake Oakley brand sports sunglasses and pirated golf equipment with famous names like Calloway and Ping. Three months ago customs officials in California seized 250,000 Beanie Babies and a batch of Teletubbies from mainland China.

The trade in fake Teletubby products such as Dipsy, Tinky Winky, Po and Laa-Laa toys has become so lucrative that the BBC, which owns the rights, hired a Hong Kong detective agency to track down the makers. Asian Security & Investigation Services sent its agents to factories in southern China, Singapore and Malaysia posing as buyers to expose the rip-off merchants.

Another Hong Kong company has set up a Beanie Babies counterfeit enforcement team to track down makers of the malleable playthings - which brings me back to Ms Barshefsky.

As the mother of a young daughter her purchase of 40 Beanie babies in the Silk Market was very understandable, but as US Trade Representative, whose job involves trying to reduce China's $50 billion trade surplus with the United States, Ms Barshefsky should have known better.

US Customs has imposed a limit of only one Beanie Baby per US traveller, and when she arrived back in the United States, her Beanie Babies were confiscated and taken into custody. There they remain, as far as is known, to this day.