Counterfeit products drain revenue base

The Government loses about 25 billion yuan (HK$23.2 billion) a year in tax revenue due to counterfeit goods, the semi-official China News Service (CNS) reported yesterday.

Quoting government data, the agency estimated that counterfeiters produced more than 130 billion yuan worth of goods each year.

It said a survey of 146 companies affected by counterfeiting showed more pirated copies were sometimes sold than the original products. For example, 23 producers lost half their sales to counterfeiters. Eleven counterfeiters actually outsold the original manufacturers and, in one extreme case, counterfeiters sold 568 times more than the original producers.

A separate CNS report said counterfeiters had also copied goods made by foreign companies, discouraging foreign investors from investing in China.

It said the Government launched an anti-counterfeit campaign in October and a conference was held last month to discuss strategies. So far, police have taken more than 150 suspects into custody and seized goods worth about 306 million yuan.

The goods ranged from cosmetics to televisions. In Guangdong alone, police raided 29 counterfeit production bases from which they confiscated goods from batteries to cigarettes worth about 15 million yuan.

But the report said police often met strong resistance from the counterfeiters, and that some local government officials were often reluctant to co-operate. Moreover, some cadres even interfered to protect the counterfeiters by providing production facilities and assistance with distribution. 'In some cases, the cadres even took part in the counterfeiting themselves,' the report said.

It quoted officials from the State Bureau of Quality and Technical Supervision as saying the anti-counterfeit campaign was a 'long-term and difficult struggle' and that the Government was determined to 'go all the way'.