North Philly Notes

This week in North Philly Notes, Ko-lin Chin writes about doing research for his new book, 
Counterfeited in China.

I have been studying transnational crime in Asia and the United States for many years, focusing on issues such as Mafia transplantation, human smuggling, drug trafficking, and sex trafficking. I live in northern New Jersey and my wife and I regularly visit New York City’s Chinatown to dine and shop. During those visits, I had noticed that there were numerous Chinese and African street vendors selling counterfeit luxury goods along Canal Street and their business was brisk. While my wife was busy shopping for groceries, I stood on street corners and watched how a team of men and women conducted their business in a smooth and synchronized manner, acting as touter, seller, fetcher, and lookout. When a transaction was completed, the seller and the buyer parted ways, both smiling in satisfaction. I wondered where these counterfeits came from, who made them, how they were made and got here, whether Chinese organized crime groups and the Chinese authorities were involved in this business, etc. To answer these questions, I decided to conduct a study in Guangzhou, China, the world capital of counterfeiting.

I planned to interview luxury goods counterfeiters in their natural settings and to observe firsthand how they ran their businesses. I conducted seventy interviews in Guangzhou, including fifty-seven counterfeiters and thirteen key informants. To supplement the interview data, I also conducted extensive fieldwork in Guangzhou. First, I spent a substantial amount of time with my research subjects. I often had lunch or dinner with them before or after the interview. Second, I visited my research subjects’ business premises whenever there was an opportunity to do so. Third, I got together with my subjects in their homes after we came to know each other well. I also met their family members. Fourth, whenever I was free I strolled the wholesale markets and shopping malls in Guangzhou. I conducted all the interviews and the fieldwork. The interviews were conducted face-to-face in Chinese, with a structured questionnaire that was a mixture of closed- and open-ended questions.

I have conducted several research projects with hard-to-reach subjects in the United States and Asia, including gang members, extortion victims, human smugglers, human traffickers, sex workers, and drug traffickers.  I was surprised to learn that counterfeiters were as hard to reach as these subjects. After encountering many challenges on the first trip, I was not sure I wanted to go back the next summer to continue with the data collection, but I am glad I did. The result is Counterfeited in China.

My study examined (1) the individual and group characteristics of counterfeiters and their relationships with organized crime; (2) the modus operandi of the counterfeiters, including their risk-aversive measures; (3) the economic aspects of counterfeiting; (4) the relationships between counterfeiting, violence, and corruption; and (5) the demand side of counterfeit goods.

Based on my interview data and field observation, I found that:

• There are many forms of imitation of luxury goods in China and these activities are probably more prevalent than point-by-point counterfeiting.  
• Contrary to popular belief, most point-by-point counterfeits are non-deceptive, meaning that consumers know that they are purchasing counterfeits.
• There is nothing unique about the people who are involved in counterfeiting in Guangzhou. They are similar to the hundreds of millions of other young men and women from rural areas who leave their hometowns searching for a better future in urban centers and trying to make it.
• Most counterfeiting businesses are small and family owned, although these small businesses can transform into a formidable network in response to market demands.
• There is no evidence to suggest that the counterfeiting industry is dominated by organized crime groups such as tongs in the United States, Mafia-like gangs in China, or triads in Hong Kong. These groups are also not in a position to provide illegal governance or protection to counterfeiters.
• The counterfeiting business is deeply embedded in the legitimate supply chain of China, so it is easy for business owners to engage in both counterfeiting and non-counterfeiting business activities simultaneously or switch back and forth.
• Violence and corruption do not play a major role in the counterfeiting business. Corruption occurs only after a counterfeiter is formally arrested, when the defendant may try to corrupt one or more government officials to avoid punishment.
• Local Chinese government officials do not directly engage in counterfeiting, although they indirectly benefit through the collection of rent. Most of the major retail and wholesale markets for both counterfeit and non-counterfeit goods are owned by state enterprises.

While I was collecting data in Guangzhou a few years back, many research subjects told me how easy it was for them to make money in the past and expressed concern about the future of their businesses. However, when I was in Chinatown recently, I noticed the buying and selling of counterfeit goods had never been so active. It seems it is the demand fueling the supply.   

Filed under: american studies, asian american studies, Asian Studies, economics/business, ethics, immigration, law & criminology, political science, sociology, transnational politics, Urban Studies | Tagged: Asia, business, China, chinatown, corruption, counterfeiting, Guangzhou, interviews, luxury goods, New York, organized crime, politics, research, Travel | Leave a comment »