April 13, 2006

Chinese Piracy Efforts [7:46 am]

Closure of Shanghai Bazaar Not Expected to Subdue Piracy [pdf]

The most expensive rents in China’s most expensive city aren’t suites on the historic riverfront, the Bund, or boutiques along Nanjing Road, Shanghai’s version of Rodeo Drive. They are flimsy stalls in a large bazaar jammed next to a smelly produce market.

Some of the 800 merchants at Xiangyang Market pay $10,000 a month or more for space no bigger than most American kitchens. Even bare walls behind stores are subleased for thousands of dollars, then converted into makeshift stores.

Customers from across the world come to buy bootlegs of famous brands. Rolex, Prada, Louis Vuitton, Mont Blanc. You name it, they’re all here. The five-acre bazaar is often the first stop on a Shanghai tour group’s itinerary.

[...] But after six years of booming business, in open view of authorities, Xiangyang Market will be closing at the end of June. Shanghai officials recently announced its shutdown, trumpeting it as a big strike in their campaign against piracy.

[...] Few believed piracy was the reason for the shuttering of Xiangyang Market. In fact, the announcement came after the city cut a lucrative deal with a Hong Kong developer who has plans to build apartments and offices on the site.

Even Xue Yong, Xiangyang Market’s vice general manager, couldn’t help but smirk when asked whether the closure was meant to curb counterfeiting.

“You cannot say it’s because of that,” he said as he sat in his third-floor office behind the market.

The story of Xiangyang Market reflects the complex nature of China’s counterfeit trade and how local governments rely on pirate markets to create jobs and revenue.

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