Fraud In Chinese Business

HuffPost has an article on a fellow in China, hard on the heels of someone opening five fake Apple stores, who claimed to have bought a USA bank from "Jews" in Delaware. No such bank. That he claimed to have renamed it HSBC something should have been a tip off.   The article goes on to name other items commonly counterfeited in China.

This kind of counterfeiting is a problem for all Chinese, and now the Party. They made a Hero out of him for buying a USA bank, until they discovered the fraud.

China law is an evolving affair, and probably the best inroductory book on the topic is by the late China-watcher Laszlo LaDany.



The book provides and sound basis from which to understand the changes in law in China today.

As to fraud, it is much in the news in China and overseas. As I have said before, it is a problem for the Chinese more than for anyone outside of China.  Anyone buying from China who finds themselves with less than happy results, only have theselves to blame.  China has excellent suppliers in every field.  Checking references and spotting frauds is part of your business.

Earlier his year I spent probably 20 hours and about $400 to get to the point I realized a fellow was probably not who he claimed to be. He provided several bona fides, and I checked one that did not pan out.  It is just part of the job to assure everythingis on the up and up.

I've blogged on China and forgeries before.  In an art history class on China, the professor offered a hypothesis as to why the Chinese are such great forgers.  Certainly they invented paper, gunpowder, the compass and who knows what else, way back when, but his argument was when under 500 years of foreign domination, the Chinese retreated to the arts and gave up innovation.  Copying became more valuable than innovation when the fruits of your creativity would be stolen anyway by foreigners.

When I first visited China back in the 1970s, the Chinese were quite open in sharing their secrets regarding imitating antiques.  Washing carpets in tea, or soaking bronze in urine, and other tricks were so widely known that it was no big deal.

Few Chinese are fooled. On the other hand, where we have strict laws against it, very many people are fooled.  The problem is not that the Chinese are so good at imitating antiques, the problem is westerners are so unschooled in spotting fakes.  There is plenty of the same going on in USA, just in a different way.  GMO foods, for instance.  They call Velveeta "cheese" and poor people eat it.  

I also noted copiers are finding more money in repairing the real thing than in copying now, more money for less work.

When I buy a Kelvin Klein shirt in Hong kong, I am not fooled.  When the country bumpkin in Hong Kong thinks it is Calvin Klein, he is still comparing that shirt to the others at the $3 price point.  He is getting his money's worth, if of dubious provenance.  How often in USA are we disappointed with our purchases?

Chinese law was designed to make people sort out their differences at a low level.  The emperor is high up and far away.  if you actually took it all the way to the Yamen, you could expect very harsh treatment whether defendant or plaintiff.  Sometimes plaintiffs got tortured too.  We in USA are not unlike  the China of old, inasmuch as our system is harsh on litigants and seeks to settle almost all cases out of court.

The differences are not so great.

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