Contending with Chinese counterfeits: Culture, growth, and management responses

Almost every product imaginable is being copied and manufactured in China, then either sold there or exported elsewhere. While some improvement in the overall intellectual property rights (IPR) environment in China has occurred recently, the issue of piracy remains a daunting one. To understand Chinese IPR conditions requires a look at the rapid growth of the nation's economy, as well as its history. With booming economic conditions has come an equivalent surge in the manufacture of counterfeit product, and ideologically the country's political culture has not lent itself to the concept of ownership of intellectual property. Both Confucianism and Communism hold no interest in individual ownership; historically, censorship has been considered more important than copyrights, and inventions as belonging to the state. Though it is virtually impossible to estimate the value of counterfeit product originating in China, totals may reach over $150 billion. Both firms doing business in China and foreign governments are dissatisfied with the current level of IPR protection. Managers need to be proactive on many levels to be sure their intellectual property is adequately protected.