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March, 2018

NPC and CPPCC reps. urge harsher penalties for counterfeiters

Original article: Beijing Youth Daily

Delegates to the National People's Congress (NPC) and Chinese People's Political Consultative Conference (CPPCC) have highlighted China's counterfeit goods problem at the "Two Sessions," the nation's most important large-scale political meetings of the year. Delegates have called for legal reform, emphasizing that the law must be used to punish and deter counterfeiters.

Analysis:

Delegates to the NPC, China's national legislature, and CPPCC, an important political advisory body, are intended to represent their respective constituencies. While the NPC and CPPCC typically vote along official party lines, they occasionally give voice to issues that may otherwise be overlooked. 


At the Two Sessions, delegates have a chance to point out IP protection problems at the local level. In an interview with Beijing Youth Daily, a representative from Guizhou Province, Yu Liufen, said that counterfeiting harmed small Chinese businesses, undercutting them on price and making it difficult to scale up. 


Yu mentioned that a spirit brand produced locally in Guizhou - People's Little Sorghum Liquor - gained national attention after President Xi Jinping gave the manufacturers advice on their pricing strategy. During a visit to Guizhou in 2013, Xi encouraged them to find the right market price. He reportedly suggested that RMB 99 - the original retail price - was high.  


Once the news media and social media commentators reported on the exchange between Xi and the sorghum liquor producers, interest in the product surged. Sales skyrocketed, earning the manufacturers several million RMB in profits almost overnight. 


Naturally, counterfeiters wanted a piece of the action. Counterfeiting activity has harmed the bottom line and brand of People's Little Sorghum Liquor, Yu explains. "We didn’t expect hundreds of counterfeit products to appear in the market. Counterfeiters copied everything about the product from bottle types to the trademark and promotional advertisements. They have caused very serious harm to the business and consumers." 


Just as China has cracked down on counterfeit currency and drunk driving, it must raise the stakes in the battle against trademark infringement, Yu said. "We must increase the penalties for the production and sale of counterfeit goods, so that the law can act as a deterrent," he said. 


Zhang Deqin, deputy general manager of the Maotai group and an NPC delegate for the first time this year, said that the Maotai brand has long been affected adversely by counterfeiting. Zhang urged Chinese firms to embrace innovation and adopt a long-term approach to growth. “China now occupies a central position on the world stage, and the nation should have confidence," he said. "If Chinese companies intend to gain a foothold in overseas markets, they must value their own brands. They should abandon counterfeiting and trademark infringement, a short-sighted approach that only offers them temporary benefits."  

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