William's final essay.

Counterfeit in China

Counterfeiting had appeared in china for several years. Lots people like it because it is very cheap and had a nice look. Actually, it’s not a right way for Chinese corporation to do. When they get the They can’t hold their own brands and just become a manufacturer
Through the world, lots of people know china only about the “made in china’ and not so much Chinese brands become popular in the world. China become a big world factory in the past decades. What cause this situation? I think one of the main reason is too much counterfeit firms in china. Counterfeiting is still a big problems in china. Lots of counterfeiting products in the market--not only internal market but also overseas market. They try to confused consumer to mix counterfeit on with real one.
Recently years, Chinese government noticed that counterfeiting is not a sustainable way for Chinese firms, they need independent innovation. For that reasons, the government want to encourage companies to give up counterfeit(Miller.W.F,Rowen.H.S,Hancock.M.G,2008). So the government give financial support to firms who do independent innovation. They want to see the change from Chinese firms. They want change the situation. In my opinion, I think it’s the time for Chinese corporations to give up counterfeiting and get into independent innovation. In my essay, I will focus on the problems which counterfeiting gave to Chinese firms and try to explain why independent innovation is a long-term strategy for Chinese companies.

Nowdays,among the Chinese firms, counterfeit is not a secret, although there are laws to ban the counterfeit in china. However, actually, government never try to stop them. That gave the confidence to firms to keep doing it and attract more and more firms joint this industry. Further more, the situation became worse and worse, even some big companies in china, they also copy brands which is famous in the world. The story didn’t finish, they called their counterfeit goods as their own, they said they created the products by themselves, it’s their own design, With the development of counterfeit in china, the firms don’t feel shame for that anymore. That’s why they never try to stop themselves. us brand. The same thing also happened in consumers, because of the cheap price , it is easy for consumers to get them .They didn’t notice that they were supporting a illegal industry.

Let’s focus on the weaknesses of counterfeit, There are lots weaknesses of it. Firstly, because of the counterfeit, firms lose the ability of design ,the only thing they need to do is to get a original one and copy it. they don’t need to invest money on design anymore. Secondly, it is impossible for companies to build up reputation ,because they don’t use they own brands, they have no brands for consumers to remember, even when consumer want to purchase again, they can’t find the same firms anymore. Thirdly, it is easy for everyone to come into this industry, there are no barriers for them, in this market, the competition is tough. It is hard for every company to get market share and survival. For some specific products like medicines, counterfeit one will damage people’ health(Wong,N.2004)Another examples like children’ toys. They quality of counterfeit one must be terrible. Children would be very danger when they are playing with those toys.

The solution I would like to give to Chinese firms is independent innovation. Which is now support by Chinese government. The strengths of independent innovation are obvious. Firstly, government support is a very import factor in business, if the firm can give up counterfeit and get into independent innovation, they can get great offer from government, like the tax back or more loans. Secondly, independent innovation makes the sustainable development. It is a health circulate for firms, which they can easily build up their brands and get stably profit. Further more, with the independent innovation. They get their own design, their unique selling point. It avoid the firms drop into the price war and help them to survival in the financial crisis. When the financial crisis comes, the counterfeit firms will easily go bankruptcy but the independent innovation firms won’t.

There are some different views for independent innovation, people think it need lot money to invest on it, they think it is kind of wasting money. they also doubt that if Chinese firms can afford this kinds of expenditure. Another opinion about this is hey think counterfeit is a kind of learn, Through counterfeit, firms can leant the design from world’s famous brands. That help Chinese firms make progress.

In my view, investment is not the problem now because of the support from Chinese government, on the other hand, the investment will return in the future, it will get back to the firms’ pocket. That won’t be a problem. For the “learn”, I think it’s just a beautiful cover for counterfeit firms, it is their way to persuade people to trust them. No evidence to prove that any counterfeit firms have turned to an independent innovation firms. They just keep counterfeiting all the time. Counterfeiting is a way to end, not to succeed

To sum up, counterfeit is not a long-term strategy for any Chinese companies and will never be a right way. If they want to get succeed, they best way for them is the independent innovation. They can get lots of benefits from independent innovation. Chinese counterfeit firms need to know that they are in a poor position if they continue counterfeiting. Counterfeit can’t last forever, It must end in someday. There are lots of examples of succeed western companies which do the independent innovation very well. That could be their guide to follow. Counterfeit firms need to give up counterfeiting as soon as possible.

Reference:

Wong,N(2004),Counterfeit Medicine: Is It Curing China?

[online],http://heinonline.org/HOL/Page?handle=hein.journals/aplpj5&div=8&g_sent=1&collection=journals#161,[accessed on 2,march,2010]

Wien.E & Wien.B(2005), Forget the “Real” Thing–Take the Copy! An Explanatory Model for the Volitional Purchase of Counterfeit Products

[online],http://74.125.155.132/scholar?q=cache:qrXjGZL0jGcJ:scholar.google.com/+counterfeit+products&hl=zh-CN&as_sdt=2000,[accessed on 2,march,2010]

Dunnigan,J(2008),China Counterfeit Surprise,strategypage

[online]http://www.strategypage.com/dls/articles/2008113203548.asp.[accessed on 1,march 2010]

Miller.W.F,Rowen.H.S,Hancock.M.G(2008),China's quest for independent innovation[online]http://fsi.stanford.edu/research/chinas_quest_for_independent_innovation/[accessed on 2,march,2010]