Chinese Trade Practices

WITH A FOCUS ON COUNTERFEITING

Presented By:
Aditi Salhotra

- 10005 Ami Savla - 10010 Ankita Sen - 10018 Dimple Laungani - 10040 Mamta Chawla - 10075 Tanvi Kokate - 10164

INTRODUCTION

 Yahoo Inc and Alibaba .com

Overview of the Chinese Economy

GROWTH OF 10 PERCENT PER ANNUM China is expected to be the worlds largest

trading nation & is the most studied economy today

There is almost no country in the world

untouched by chinese goods today

Every major international decision is taken

keeping the impact of china in mind

History
1911 End of the Ming Dynasty Upto Mid 1940s Kuomintang Rule

(Chinese were subjugated to a state of utter humiliation & penury)

1949 Chinese Independence (from Chinese

Rulers) & Foundation of the Peoples Republic of China

1978 The growth journey of china begins

Lessons from their past

1. Survival of the Fittest
2. Unity can be enforced due to state of

extreme paucity
3. You cant trust outsiders 4. Power must be equally in the hands of all

not just rulers hence socialistic

Current Imbalances in the Chinese Economy

Due to the law of one child no siblings & extended

family
Rising Consumption Pattern of the young

Looming Talent Shortage

Regional Imbalances in growth Mass scale exploitation , particularly in villages, even

after WTO regulations

Chinas entry in WTO and its Impact

Chinas Trade Policy After years in the WTO

A well-functioning multilateral trading system has

contributed considerably to China's sustainable economic growth and development

The multi lateral trading encourages flow in all

directions
Chinas WTO accession not only increased its

competitiveness but also now other countries could import more in China

 Impelled China to be accountable to an

internationally agreed set of rules and bind them to wide-ranging economic and systemic changes in order to meet the commitments they have agreed to undertake as a part of WTO accession
China's commitment to liberalize the terms under

which foreign firms can invest in telecommunications, distribution, and financial services
The protocol governing its accession sets forth

China's commitment to abide by international standards in the protection of intellectual

Benefits for China

China's deeper integration in the global economy

may make China more a constructive participant in a new round of global trade liberalization
Concomitant acceleration of domestic economic

reform, also will make it more likely that China will be able to meet the expectations of its population of 1.3 billion for improved living standards

Counterfeiting : A Prevalent Chinese Trade Practice

Still a cause for concern..!!!!

Actually I am very glad that people can buy Armani - even if it's a fake. I like the fact that I'm so popular around the world..!! Giorgio Armani

Counterfeiting
The process of fraudulently manufacturing,

altering, or distributing a product that is of lesser value than the genuine product
The spread of counterfeit goods (commonly

called "knockoffs")
Most commonly applies to currency and coins Knockoffs account for 7 percent of world trade

Global Effects
Crowded out markets Squeezed profits Dullens incentives to innovate or invest

Commonly counterfeited items

Medicines Operating systems Footwear Sneakers Clothing

Sports Jerseys
Consumer electronics Batteries Cellphones Handbags Watches

Top counterfeiters
China
Russia

Argentina
Chile Egypt India Israel Lebanon Thailand

Turkey
Ukraine Venezuela

Prevalence of counterfeiting in China

Two-thirds of the counterfeits in the world come

from mainland China

Ascendance as an economic power

Due to huge investment of technology and

capital
Its economic evolution from communism to free

markets has also contributed to a surge in illegal activity

FACTS
China accounts for up to 80% of all

counterfeit goods in the global marketplace

The U.S. Customs Service reported that it seized

counterfeit and infringing goods valued at $93 million in 2005 (China (69%) and HongKong (6%))
Brand owners estimate that between

15-20% of all well known brands in China are counterfeit

 Counterfeiting is now estimated to account for

8% of Chinas gross domestic product

Many municipalities and towns in China depend

upon counterfeiting to sustain their local economies

There are millions of people, perhaps tens of

millions of people, involved in counterfeiting in China

And hundreds of thousands of people involved in

anti-counterfeiting.

Three major operations

Legitimate factories that have licenses to produce

goods on behalf of brand-name companies

Joint ventures between a multinational and a

Chinese partner
Underground facilities that make items such as

cigarettes

Actions taken by China

China's membership in the World Trade Organization in 2001 forced

the country to beef up its observance of intellectual property rights. International Property Rights (TRIPS) agreement.

Due to this , has been subject to the Trade-Related Aspects of Section 5, Article 61 of the TRIPS agreement states that,

Members shall provide for criminal procedures and penalties at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary fines sufficient to provide a deterrent
Chinese authorities are working more cooperatively with other

countries on intellectual property issues.

China is a part of international agreements to protect intellectual

property (including WIPO, Bern Convention, Paris Convention, among others).

Hindrances faced by China

Its large population ( Approx 1.4 billion )

Provincial Structure
Police to population ratio is roughly 1 : 833 Local police are prohibited from crossing province lines to

shut down counterfeiting

Many provinces, dependent on the tax revenues from

counterfeit companies, turn a blind eye to counterfeiting

Ways to protect yourself from Counterfeiting

Scrutinize labels, packaging and contents

Seek authorized retailers

Watch for missing sales tax charges Insist on secured transactions Seek quality assurance in the secondary market Report questionable span and faulty products

Be vigilant when buying abroad

Warn your kids ,family and friends about counterfeits Protect your IP

Thank You..!!!!