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Ex-lecturer's brainchild proves the genuine article

Mark O'Neill

It is nicknamed China's Silicon Valley, an area of northwest Beijing that is home to thousands of computer and high-technology firms.

But Zhongguancun is also famous for something else - fake documents.

You need a passport, an identity card, a driving licence, a certificate of marriage or divorce, of birth or even death? All are available at the right price to guide you through the minefield of Chinese bureaucracy and help you get a job or a contract in an increasingly competitive market.

An ID card costs 400 to 500 yuan (HK$372 to HK$465), a Beijing University graduation certificate 600 to 700 yuan, a death certificate used to claim insurance money is 300 yuan and a marriage or divorce document, needed to get a flat from your work unit, will set you back 400 to 500 yuan.

The biggest market for fake documents are the estimated four million people from outside Beijing who reside in the capital and are the softest targets for avaricious policemen, tax collectors and building inspectors.

The fakes are part of an underground economy which makes the mainland one of the world's biggest producers of fake and counterfeit goods and a nightmare for many legitimate firms, foreign and domestic.

Fakes are so widespread that businesses mistrust the money they are given. Sales counters in shops are equipped with machines which staff use to verify if each 100 yuan note they are given is genuine.

This is one reason why the central bank introduced a red 100 yuan note on October 1 that is harder to fake than the blue ones issued since 1980.

Wang Qinghe, a former university lecturer, turned the problem of forgery into a business opportunity. In 1995, he set up a company to make anti-forgery software to protect brands such as cigarettes and alcohol.

'People will not buy a brand they have never heard of so you must make well-known brands,' Mr Wang said.

'Profits on fakes are enormous, since most of the price consists of tax, which they do not pay. The production cost may be one yuan and the official retail price 11 to 12 yuan, leaving a wide margin of profit.

'It is hard to close the factories making the counterfeits as they provide jobs and tens of millions of yuan a year in taxes to local governments. So local police and other law enforcement agencies will not act against them.' Mr Wang's answer to this dilemma is software. Each product of a legitimate manufacturer is stamped with a label containing a 21-digit number, which appears when the surface of the label is scratched. The numbers are chosen at random by computer and recorded in a national database.

The consumer can find out if a product is genuine by calling a telephone number to check the 21-digit number against the database.

Counterfeiters find it hard to fake the numbers as there are too many possible combinations for any one item.

Mr Wang said 400 large firms covering 50 to 60 per cent of China's major brands used the technology.

His company, Beijing Guoxin Anti-Forgery Technology, also produces software to detect fake documents including export tax rebates, ID cards, cheques, bills and letters of credit.

It produces an ink which is painted on a document and only visible under a special detector, and a bar code that is stuck to each individual document.

At 5,000 yuan each, the detectors are sophisticated yet simple to use and any local government can afford them, according to Mr Wang.

His business has great potential, especially in the area of fake receipts which people use to claim money from companies and the Government.

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