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Wednesday, Jan. 7, 2009 04:42 pm

Chinas ethos of piracy

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Computers are for sale on Beijing’s “Silicon Street” and look like bargains, but they often come with pirated sofware.
PHOTO BY JOSE MERCURY/MCT

The year 2008 went out with a big bang for Microsoft. On Dec. 31, a court in China’s southern city of Shenzhen convicted 11 people of violating national copyright laws for manufacturing high-quality fake versions of Windows XP, Vista, Office and 16 other Microsoft products, and distributing them in 36 countries. They were sentenced to prison terms of one-and-a-half to six-and-a-half years.

The sentenced individuals belonged to a sophisticated counterfeiting syndicate whose production capacity was bigger than Microsoft’s own facilities in Europe, the Middle East and Africa, and whose global sales exceeded $2 billion. Since their products were found in more than 300 different cities in the United States, the FBI cooperated in a joint multiyear anti-piracy effort with the Chinese Ministry of Public Security to tackle an issue that has long irked label manufacturers and intellectual property rights holders worldwide.

As impressive as it is, this joint effort against — according to Microsoft — the biggest software counterfeiting organization ever seen, still leaves China’s domestic market untouched. More than 80 percent of software used in China is pirated, and dismantling it would bring the whole country’s scientific, businesses, government and educational institutions to a halt.

Software is hardly the “tip” of China’s piracy iceberg. The country is flooded with bogus products — from fake watches to phony baby food and from fake eggs to knockoffs of Dior, Louis Vuitton and Prada — that come in various degrees of realistic appearance and in a price range ten to hundreds of times cheaper than the authentic products.

On our recent visit to Shanghai, we were tempted on nearly every street corner by pirated versions of the latest film releases on DVD. Quantum of Solace, the latest James Bond flick, sold for under $0.75 (5RMB) before the film even opened in the United States. For 25 cents more, respectable shops sold a vast selection of DVDs of new movies and classic films from all over the world. And for just a few more cents apiece we could have amassed a collection of jazz or classical music on CDs that would have been the envy of all but a few of the most dedicated and wealthy collectors in New York.

Neither consumers nor authorities blink an eye at this blatant practice. Using pirated goods is treated as an acceptable way for the cash-starved Chinese citizens to narrow the cultural and knowledge gap with the West after decades of oppressive isolation. The government sees it as a fast track into the ranks of the world’s most advanced, powerful nations. But counterfeiters also provide material banned by government censors. Since only 20 foreign movies a year are officially acquired for distribution in China — and with portions slashed by censors if deemed to contain the slightest moral ambiguity.

When the butchered version of Ang Lee’s film Sex, Caution, set in the 1930s and 1940s Shanghai, played to disappointed crowds across China, many rich mainlanders went across the border to see the real thing in Hong Kong. And the less affluent purchased the uncut counterfeit version on DVD to watch at home.

College students often rely on counterfeited western books for information about the Cultural Revolution, the June 4 massacre and other controversial topics banned or heavily censored by the government. Professors and scientists rely on unauthorized translations of books and research papers in all fields.

Making the counterfeit problem worse is the fact that local officials accept kickbacks and payoffs from counterfeiters to enrich themselves. The cost of this blatant disregard for regulation comes at a great cost to China: Just like melamine in powdered milk, this moral decay is spreading like cancer throughout Chinese society.


Peter Kwong and Dusanka Miscevic live in New York City. Their last book was China as America: The Untold Story of America’s Oldest New Community.

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