Time to Get Tough on Counterfeiters

Do you realize that the Western world is turning a blind eye to one of the biggest trade crimes of modern times, and, in so doing, is allowing the main perpetrator to use the proceeds to help fund its economic growth?

The crime is counterfeiting and the perpetrator is China. According to local authorities, it pays lip service to the concept of intellectual property, copyright or trade name protection. The counterfeit products made in that country run the gamut from bootlegged CDs to fashion knockoffs to imitation perfume to bogus watches … the list gets longer by the year. But what’s often ignored is the plethora of counterfeit industrial products being added to the list.

These fake, often inferior products pour out of China and reach the rest of the world by well-established trade links.

When China joined the World Trade Organization in 2001, it promised to conform to the group’s rules as defined in Trade-Related Intellectual Property Rights (TRIPS). To date, international authorities say there is little evidence of this happening.

Yes, other nations counterfeit goods too, but China leads the pack, and in the world of industrial products, it is in a league of its own. As you may read in our feature report on page 19, it is likely costing our electrical products industry alone up to $1-billion a year.

China is still an authoritarian state where nothing is allowed unless the state approves it. This means counterfeiting is being condoned. Of the 8,000 stands at the twice-yearly Guangzhou Fair in southern China, 300 will be selling electrical goods, with counterfeit items at virtually all of them. Certainly, if you go to China and unearth a plant that is counterfeiting your goods, the authorities will rush in to shut it down for you, in your presence. But little happens proactively to stop the practice of counterfeiting.

Counterfeiting also tarnishes the West’s reputation. In overseas countries, when a faulty circuit breaker or a poorly copied electrical conduit fails and a serious accident ensues, who will get the blame? The West, of course, for supplying second-rate products.

It is one thing to give someone a fair shake of the dice in matters of trade, quite another to give them the keys to the bank and turn off the alarm system, which is what we are doing for China. It is time to put an end to it.

A key to protect yourself is to take steps to ensure your suppliers are providing you with legitimate products. There’s nothing wrong with known Made-in-China products — like certain lines of bearings, for example — that are produced in advanced manufacturing facilities there, often by the same vendors you deal with daily. It’s the fake stuff you’ve got to watch out for. But even astute industrial distributors can be fooled.

We must institute an international tribunal with teeth and haul China before it. We must make clear to China that unless it takes genuine steps to curb counterfeiting, its own original products will be hit hard by duties and sanctions. We must make it aware that it is in its own self-interest to play fair or face stiff retaliation — and we must do it now.

Otherwise, industrial incidents — both minor and serious — will continue to escalate, and without action, we can only blame ourselves.