Knockoffs, Cars, and an Electric Chair: Paper Replicas to Burn for the Qingming Festival

Shop in Jiangmen, Guangdong, selling paper replicas to burn for the spirit world

Last year in Guangzhou during the Qingming Festival, also known as Tomb-Sweeping Day, I saw many people spend at least part of the day doing something not part of the spiritual side of the day, such as spending time at pedestrian shopping street. But it still wasn't hard to find people observing the holiday, such as a family burning paper replicas of iPhones, clothing, money, and other objects to send to their ancestors in the afterlife — part of a common Qingming tradition, as is visiting grave sites.

Like in Guangzhou, today on the holiday's return I saw many people in Jiangmen simply enjoying the day off or working as usual. I didn't happen to stumble upon any burnings. And I didn't visit any graveyards. But this afternoon I did pass one shop selling paper replicas to burn. They may have already sold out of some items, but they still had a varied selection.

As I saw in Guangzhou, there was clothing for sale. And of course there was plenty of the traditional ghost money.

Shoes were available as well.

You were in luck if you wanted to send shoes with a matching knockoff "Louiis Vuitton" bag.

There were also combo packs which included all-important smartphones.

And a collection of cars was available.

The cars depict people inside, which raises the question of whether burning them sends both the car and the people to the spirit world. I would honestly be curious to hear experts' views on this.

While there are other ways people remember and honor their ancestors during the Qingming Festival, the practice of burning paper replicas presents an intriguing intersection of spiritualism, materialism, and pragmatism. Whatever the ultimate result of the offerings, at the very least they express that one hasn't forgotten the departed and can help keep some memories alive.

Finally, there was one item for sale that left me briefly puzzled, because at first I wasn't sure what it was. And then I realized . . .

Who in the spirit world wouldn't want to relax in a deluxe massage chair?

Undoubtedly Authentic: More Mobile Fresh Milk in Guangdong

Chaozhou and Jieyang, bordering cities in eastern Guangdong province, share much in common. So after recently seeing fresh goat milk for sale in Chaozhou, I wasn't entirely surprised to see a similar arrangement yesterday at a street intersection in Jieyang.

Like the milk seller in Chaozhou, the tricycle cart carried three goats (in the above photo two of the goats are off the cart mostly out of view). Unlike the milk seller in Chaozhou, the tricycle cart had a motorcycle front end.

Nearby, another seller offered offered milk from a more common source.

While there, I was fortunate enough to witness a milking for a customer's order.

Having grown up in an area with many farms, I have seen plenty of cows before. I haven't seen many on motorized tricycle carts in the middle of urban areas though.

With concerns about fake products and past milk scandals on the minds of many in China, even inspiring cross-border trips for milk products, it is easy to think of reasons why this option would appeal to some people. Questions remain pertaining to the milk's quality, including ones about the animal's diet, but there is no doubt about its source, its freshness, or whether anything was added after it left the animal.

Gelatin and Dumpling Woes: China Needs More Donkeys

Rare are the days when The New York Times mentions a "donkey crisis" and "ass glue", but such occurred today. Chris Buckley reports a shortage of donkeys in China increases the likelihood your donkey skin gelatin is a fake. This poses a problem especially for people who believe the gelatin has medicinal properties and can't be replaced with even mule skin gelatin or horse skin gelatin — those are completely different.

To my knowledge, I have never ingested donkey skin gelatin. I may have been affected by China's donkey dilemma in another way though. The news made me think of a restaurant in Handan, Hebei province, where five years ago I ate my first donkey dumpling.

Restaurants serving donkey meat generally aren't difficult to find in China, and Handan isn't the only place where I have eaten it. My first experience was at a restaurant in Shanghai and later experiences occurred in Beijing and Huizhou. I didn't expect any special benefits from the meat and selected the dishes out of curiosity and the desire to immerse myself in China's food culture. Donkey dumplings definitely aren't for everybody, but I haven't heard a convincing argument as to why eating donkey meat is ethically very different from eating other meats such as beef.

In dumplings, sandwiches, or hot pots, the meat had a distinctive flavor. When friends have asked about the taste, I stated the obvious: it tastes like ass. But now I have more reason to question whether all of the dishes I tried included genuine donkey meat. Am I more of an ass if they did or they did not? I can easily imagine how some friends might reply.

Genuine, Fake, and In-between: A Visit to Electronics Markets at Shenzhen's Huaqiangbei

Several days ago I spent part of one afternoon in Shenzhen's Huaqiangbei (also known as Huaqiang North) commercial area. According to ShenzhenShopper:

Theres over 20 shopping malls located in the Huaqiangbei area which provides about 70 million square meters of business area. Annual sales reaching over 20 billion, and there’s something like 130,000 people employed in the area. Yep, it’s large.

Huaqiangbei is most known for being one of the biggest electronics markets in the world. For many first time visitors, especially those already familiar with typical consumer electronics chain stores in China, I would agree with the suggestion on PIXEL to:

Skip [the consumer electronics shops] and spend your time in the buildings dedicated to Android tablets, “Shanzhai” phones (copies), phone accessories, components, LEDs, various gadgets, etc.

Just one of the shopping centers on its own can be overwhelming to those not accustomed with their scale, density, and intensity. Charles Arthur shared a gallery of photos on The Guardian. As prelude to another gallery of photos on Tech in Asia, Paul Bischoff wrote:

Within lies stall after stall after stall of nearly every gadget, component, and tool imaginable. Over half a dozen city blocks are filled to the brim with crowded marketplaces, each ranging from four to 10 floors high. Photos hardly do it justice. The place is immense.

For a variety of reasons, I kept my photo-taking activities to a minimum this time. The photo above is of an alley on the outskirts of Huaqiangbei. On both sides are huge electronics markets which aren't labeled even on Seeed Studio's detailed Shenzhen Map for Makers (free PDF download). The several markets I visited on this block mostly focused on mobile phone products — from components to complete phones to accessories. Here is just a small taste of what I saw in these markets where the line between genuine and fake can be blurry:

• Thousands of mobile phones with cracked screens, some showing clear signs they were from the U.S.
• Screens for various brand name phones for sale.
• Workers fixing and cleaning phones.
• Workers affixing brand name labels to unmarked batteries.
• Workers packaging iPhones to appear as new.
• Foreigners making purchases, reminding me of what I learned at a fake stuffed toy wholesale store in Guangzhou.

There is much more to say about Huaqiangbei, but I will leave it this for now. It can be a fascinating place to visit, even if you don't need to change an iPhone 5c into an iPhone 5s.

Yahoo Leaves, Apple's Watch Copied, and GitHub Attacked: Assorted China Tech Links

In addition to other topics, I plan a return to some China tech-related themes here. For a starter, I'll share assorted excerpts of four recent pieces sans commentary by me. Much more can be found by clicking the related links.

1. Yahoo closing its office in China received a lot of media attention. Michael Smith, an ex-Yahoo employee, provided some useful perspective:

China was really just one of the last remote engineering orgs to go. Brazil gone. Indonesia gone. The centralization plan was back on target. Build in HQ – launch everywhere. Like a lot of big internet companies really.

So yes – they closed China. I don’t think it has any connection to a pull back in China since Yahoo is already gone from China. Now the engineers are too.

Big deal. Not.

2. Even before Apple's new smart watch was publicly available, you could buy an imitation of it in China. Peter Ford reported one person's account of the processes used in China's electronics copying business:

If there are product details he is unsure of, he says, “I wait for the product to come out, or ideally see if I can get it earlier than the release date.” Since so many electronic goods are made in China, where factories “are leaky, very leaky,” he adds, “people will straight up offer that stuff to you.”

Nor does a manufacturer of what the source calls “facsimiles” need to resort only to the black market to see engineering ahead of time. “Companies like Apple buy things from other providers and put them together in a pretty package,” he says. “I don’t even need to ‘pirate’ their stuff; I just buy it from the same guys who sell it to them [ie Apple].”

3. Github, an online site used by many developers worldwide for coding, has been the target of a remarkable attack. Eva Dou explains the attack and why it appears that not only is the source based in China but the Chinese government is behind it:

Mikko Hyponen, the chief research officer of cybersecurity firm F-Secure, said the attack was likely to have involved Chinese authorities because the hackers were able to manipulate Web traffic at a high level of China’s Internet infrastructure. It appeared to be a new type for China, he added. “It had to be someone who had the ability to tamper with all the Internet traffic coming into China.” he said.

4. Erik Hjelmvik at NETRESEC provides an intriguing and in-depth look at how the GitHug attack works:

We have looked closer at this attack, and can conclude that China is using their active and passive network infrastructure in order to perform a man-on-the-side attack against GitHub. See our "TTL analysis" at the end of this blog post to see how we know this is a Man-on-the-side attack.

In short, this is how this Man-on-the-Side attack is carried out:

1. An innocent user is browsing the internet from outside China.
2. One website the user visits loads a javascript from a server in China, for example the Badiu Analytics script that often is used by web admins to track visitor statistics (much like Google Analytics).
3. The web browser's request for the Baidu javascript is detected by the Chinese passive infrastructure as it enters China.
4. A fake response is sent out from within China instead of the actual Baidu Analytics script. This fake response is a malicious javascript that tells the user's browser to continuously reload two specific pages on GitHub.com.

That's all for now, folks.

Assorted Technology in China Links: Illogical Business, Xiaomi's Growth, Fake Deals, and Your Apple in China

Several recent articles about technology in China have caught my eye. Some I hope to comment on next week, but I suspect I wont make it to others. So for four of those, here are links, excerpts, and very brief comments.

1. In an interview Lenovo's Chief Executive Yang Yuanqing commented on their competitors in China's mobile phone market:

I would say China is the most competitive market in the world. There are so many local players, and some of them are not logical in how they do business. They don’t want to make money in the short term. We definitely don’t want to lose our leadership position in China, and we must balance growth in market share with profitability.

It would be interesting to hear more of Yang's thoughts about the "not logical" local players and their long term potential.

2. Market analyst Canalys says that at least in one measure Xiaomi has passed Samsung in China:

In little over a year, Xiaomi has risen from being a niche player to become the leading smart phone vendor in the world’s largest market, overtaking Samsung in volume terms in Q2. Xiaomi took a 14% share in China, on the back of 240% year-on-year growth. With Lenovo, Yulong, Huawei, BBK, ZTE, OPPO and K-Touch, the eight Chinese vendors in the top 10 together accounted for a total of 70.7 million units and a 65% market share.

Though as someone from Lenovo might point out, higher volume doesn't necessarily mean higher profits.

3. The profitable e-commerce company Alibaba has made a deal with some luxury brands such as Burberry:

Like many premium brands, Burberry PLC had been fretting about a flood of discount Burberry products—some of them fakes—on Alibaba's two big marketplaces, which accounted for 80% of China's estimated $300 billion in online shopping last year. Burberry hadn't authorized any of those vendors to sell its goods.

Alibaba would do its best to get those products off its sites if Burberry opened its own shop on Alibaba's online mall, Burberry was told, according to people familiar with the talks. Burberry opened a store on Alibaba's Tmall in April.

Some would say this is the pragmatic side of doing business in China.

4. In perhaps another sign of pragmatic decisions, Apple is changing how it stores users' data:

Apple Inc (AAPL.O) has begun keeping the personal data of some Chinese users on servers in mainland China, marking the first time the tech giant is storing user data on Chinese soil . . .

The data will be kept on servers provided by China Telecom Corp Ltd (0728.HK), the country's third-largest wireless carrier, Apple said in a statement on Friday.

The article notes a few issues this change raises, such as data access speeds and privacy. Relevant to these issues is a definition of "some Chinese users" that would indicate exactly who fits into this category. I haven't seen one yet.

And that is all for now.

An Easy-to-Identify Knockoff Chanel Shirt in China

Knockoffs of well-known international clothing brands are a far more common sight in China than imitations of well-known international hotel brands. Just how common is not simple to pin down though. Depending on the degree and quality of the imitation, it can be challenging to identify knockoffs based purely on their appearance, especially if one is not familiar with the brands. For example, today in Hengyang, Hunan province, I saw someone wearing what appeared to be a Chanel shirt.

After a quick check of Chanel's website, I now see that the shape of the two interlocked letters in the logo seems less circular than the interlocked letters in Chanel's standard logo, but I am still not sure whether the shirt is a knockoff or not. I would not be surprised if Chanel could provide a very quick answer.

In contrast, there are other shirts I feel confident labeling as knockoffs even without checking a website or consulting a fashion expert. For example, also today in Hengyang, I saw someone wearing a shirt with what is clearly only an imitation of Chanel's brand.

As everyone knows, the interlocked letters in Chanel's logo don't have rounded ends. Sometimes it is so easy.

Xi Jinping's Advice for New Zealand

Last year I shared the story of a young man I met who would regularly travel from mainland China to Macau to purchase baby formula produced in New Zealand. Like many others in China, he did not trust Chinese baby formula due to a number of milk-tainting scandals. He was also not confident that the foreign formula he could could purchase in mainland China would be genuine. In a later post, I commented on the creative approach taken by a Chinese baby formula company to garner the trust of Chinese consumers through advertisements placed on far-away London buses.

So I must admit my jaw dropped a bit when I saw the Chinese news agency Xinhua had this to say about a recent meeting between China President Xi Jinping and New Zealand Prime Minister John Key:

Xi stressed that food safety concerns people's health and urged New Zealand to take tough measures to ensure food quality and thus maintain the sound momentum of economic and trade cooperation between the two countries.

As Josh Chin reported in the China Real Time Report, I was not alone in my reaction:

In a country where authorities routinely accuse other governments of casting hypocritical stones, the notion of Mr. Xi berating another country’s leader over food safety proved too much to bear for many social media users [in China].

“He should be saying this to himself,” wrote one microblogger. “How does he have the gall to say this to the New Zealand prime minister?”

For more about what prompted Xi's recommendation to New Zealand and how Chinese responded online, see Chin's full article here.

Smoking in China, From Restaurants to Primary Schools

In an earlier post I highlighted a Chinese bachelor celebrating his upcoming marriage. Although his red bra was unusual, it was not surprising to seem him offering free cigarrettes to people. Sharing cigarettes is common in a variety of social settings and smoking is a regular part of life for many in China. According to findings reported by Gallup in February of this year:

Three in 10 Chinese said they smoke regularly (25%) or occasionally (5%), according to Gallup surveys conducted shortly after China's ban on smoking in public places took effect last May. This translates to roughly 320 million adults -- or more than the entire population of the United States -- and underscores the potential health crisis China faces as it tries to reduce an estimated 1 million smoking-related deaths each year in its country.

The results are especially striking when broken down by sex. 57% of men compared to 3% of women* say they smoke--a difference easy to believe based on casual observations of smoking behavior in China. But in part because the results reflect self-reported behavior, I would not be surprised if they underestimate the true number of smokers.

The harm smoking causes has not gone unnoticed in China. However, one could question the efforts to reduce smoking. For example, as reported in the Voice of America there are signs recent smoking bans would not win a prize for effectiveness:

... Angela Merriam of the Beijing-based China Policy organization says the new smoking ban is not being consistently enforced.

“The ban on smoking in public spaces is completely ineffective. For example, I have a student who did an informal survey of just over 60 establishments in China. Of those polled, almost 70 percent said they permit smoking. And while 80 percent had heard of the regulations, only 12 percent of people in the restaurants had heard of a fine for a violation of the regulation.”

Smoking break in Changsha (previously shared here)

Although I am not at all convinced the bans have been "completely ineffective", Merriam's informal survey feels roughly consistent with what I have seen in some Chinese cities. But I have also had the impression that the number of people smoking in public places is not as large as it was several years ago. Nonetheless, seeing people smoking in "no smoking" restaurants, hotel lobbies, and other public spaces remains part of a regular day for me. It is even not uncommon to see ashtrays within sight of no-smoking signs. Staff at one hotel told me they gave up trying to tell guests to stop smoking in the lobby and brought ashtrays out in a pragmatic move to avoid messes of cigarettes and ashes.

In addition to typical concerns regarding smoking, another health issue is a factor due to something else common in China: fake products. Several years ago, Te-Ping Chen in a fascinating article on Slate described the rather profitable production of fake cigarettes in Yunxiao county, Fujian province:

Ringed by thickly forested mountains, illicit cigarette factories dot the countryside, carved deeply into caves, high into the hills, and even buried beneath the earth. By one tally, some 200 operations are hidden in Yunxiao, a southwestern Fujian county about twice the area of New York City. Over the last 10 years, production of counterfeit cigarettes has soared in China, jumping eightfold since 1997 to an unprecedented 400 billion cigarettes a year—enough to supply every U.S. smoker with 460 packs a year. Once famed for its bright yellow loquat fruit, Yunxiao is the trade's heartland, the source of half of China's counterfeit production.

...inhaling the knockoff cigarettes may do even more damage than their genuine counterparts. Lab tests show that Chinese counterfeits emit higher levels of dangerous chemicals than brand-name cigarettes: 80 percent more nicotine and 130 percent more carbon monoxide, and they contain impurities that include insect eggs and human feces.

Although many fake cigarettes are sold abroad and continue to be a problem globally (recent examples in the U.S. and the U.K.), the challenges faced by Chinese smokers are particularly high:

The number of counterfeits flooding the domestic market is similarly off the charts. "Each of us has come up with our own strategy to deal with it by now," confided one Beijing smoker who refuses to buy at locations where he doesn't know the owner. On trains, conductors roam the aisles, industriously hawking 75-cent keychain lights that purportedly reveal fake packs.

I have spoken with small-store owners and smokers who employ a variety of their own strategies to ensure they sell or purchase non-counterfeit cigarettes. Sometimes it seems questionable whether their methods are highly reliable. Whatever the case, reducing the numbers of fake cigarettes being produced in China could have an impact both there and abroad.

Despite the already high numbers of smokers and the efforts to reduce smoking, tobacco companies continue to seek more customers in China. Although bans on cigarette advertising exist, tobacco companies work around them, even through their "charitable" acts. Last year, Malcolm Moore in The Telegraph noted some striking examples:

More than 100 primary schools in China are now sponsored by tobacco companies on the hunt for the next generation of smokers, according to antismoking campaigners.

The schools often bear the names of Chinese cigarette brands, such as Zhongnanhai or Liqun, over their gates and in some cases have slogans in the playground.

"Talent comes from hard work – Tobacco helps you become talented," says one slogan, in foot-high gilt letters, on the front of the Sichuan Tobacco Hope Primary School...

"Inside the schools, they often have branded uniforms and distribute cigarette-shaped sweets. Vendors near the school gates usually sell cigarettes one-by-one, rather than in packets," said Mrs Wu.

Moore also mentions that regulating the tobacco industry has proved challenging due to how it is administered by the government and its significant tax contributions.

It seems numerous hurdles must be overcome for smoking to be significantly reduced. In a later post, I will share one of my more rememberable experiences witnessing smoking in a non-smoking area. It relates to an attention-grabbing anti-smoking campaign conducted elsewhere in Asia which could possibly inspire new approaches in China.



*For a possible explanation as to why there are fewer women smokers in China and why the patterns have been "found almost no place else, except for nearby Asian countries such as Japan and Korea", see an article by Susan Rosegrant in the magazine for the University of Michigan's Institute for Social Research here.

Mitt Romney and Counterfeit Valves from China

I previously shared this quote of Romney from the second U.S. presidential debate (full transcript here):

We can compete with anyone in the world as long as the playing field is level. China's been cheating over the years. One by holding down the value of their currency. Number two, by stealing our intellectual property; our designs, our patents, our technology. There's even an Apple store in China that's a counterfeit Apple store, selling counterfeit goods. They hack into our computers. We will have to have people play on a fair basis, that's number one.

I argued that even under a generous interpretation of his comment about the Apple store, it was not particularly relevant to whether the "playing field is level" for the U.S. and China. In short, most accounts and my own many experiences do not support a belief that many "fake" Apples stores in China are selling counterfeit Apple products (more about Romney's earlier comment and the many "fake" Apple stores I have seen in China here).

In the third and final U.S. presidential debate both candidates made a few comments about China. Romney again raised the issue of counterfeit products (full transcript here):

We have to say to our friend in China, look, you guys are playing aggressively. We understand it. But this can't keep on going. You can't keep on holding down the value of your currency, stealing our intellectual property, counterfeiting our products, selling them around the world, even to the United States.

I was with one company that makes valves and - and process industries and they said, look, we were - we were having some valves coming in that - that were broken and we had to repair them under warranty and we looked them and - and they had our serial number on them. And then we noticed that there was more than one with that same serial number. They were counterfeit products being made overseas with the same serial number as a U.S. company, the same packaging, these were being sold into our market and around the world as if they were made by the U.S. competitor. This can't go on.

It is notable that Romney mentioned counterfeits, but did not mention any counterfeit Apple stores this time. I'll admit, I am pleased to know that Romney must have read this blog. It is worth noting that he did not use the tech-related examples involving either Google or Microsoft that I thought could be useful for his uneven playing field claim. As I mentioned before, this may be because it would not be beneficial for such companies to be publicly mentioned by a leading political figure in the U.S. If they were, it could increase perceptions in China that they are arms of the U.S. government.

Instead, Romney used an example of counterfeit valves. I have no familiarity with the valve trade nor do I have any experience with fake valve stores in China. I will just say there is nothing in his account that strikes me as peculiar or especially unlikely. In fact, it reminded me of a wholesale counterfeit toy store I saw in Guangzhou which had several customers in the U.S. I can only assume Romney chose an example of valves instead of my example of cuddly stuffed toys because most of the toys in the store I highlighted were of animated characters from Japanese games, TV shows, and movies. If only the store had sold counterfeit stuffed Disney toys my post might have made it into a presidential debate. Oh well.

That's all for U.S. politics here for now. Like before, I doubt this particular comment in the debate will be what matters most to American voters as they consider their vote in the upcoming election. But I assume many Americans would agree that China selling counterfeit goods is not good for the U.S.

After all, someone could seriously hurt themselves using a counterfeit bayonet.

Mitt Romney and Counterfeit Apple Stores in China

The most recent U.S. presidential debate touched on some China-related issues, and I would like to comment on at least one of them.

No, this post will not be about the single question from a Shanghainese female I know:

Binders of women. What does 'binders' mean here?

Nor will it be about the many creative answers she received from friends.

Instead, I want to focus on this statement by Mitt Romney (copied from a debate transcript here):

We can compete with anyone in the world as long as the playing field is level. China's been cheating over the years. One by holding down the value of their currency. Number two, by stealing our intellectual property; our designs, our patents, our technology. There's even an Apple store in China that's a counterfeit Apple store, selling counterfeit goods. They hack into our computers. We will have to have people play on a fair basis, that's number one.

When listening to the debate live, Romney's reference of the "counterfeit Apple store, selling counterfeit goods" struck me as peculiar. I had assumed he was talking about the widely-reported "fake Apple Store" in Kunming. But that situation has long since been resolved, and I am not aware of any evidence that the Apple products it sold were counterfeits. However, it would be easy for me to believe there exists at least one store somewhere in China that could be reasonably called a "counterfeit" Apple store and that sells counterfeit goods of some sort (even if they aren't Apple products but instead are accessories designed by other companies). Since it is not clear which exact store Romney is referencing and he does not specify which type of goods are being counterfeited, I would not consider Romney's Apple store claim to be necessarily untrue. But whether he was referencing the store in Kunming or another store in China that has somehow caught his attention, I am not convinced the example was relevant in regards to arguing that the playing field is not level in China.

As I have detailed before, what counts as a "fake" Apple store can be fuzzy. And since so many potential offenders can still be found, at least at the moment Apple may only be taking action against those that go to extremes in imitating a real Apple Store. Furthermore there exist many Apple-authorized retail stores in China that are not Apple Stores, and it is not illegal for unauthorized stores to resell genuine Apple merchandise in China (see previous two links for more about these topics and examples of both fake and authorized Apple stores in China). Although I have seen mobile phones for sale in China that appear to inappropriately use Apple's trademarks (see here and here for two of my favorite examples), I have never seen such phones for sale in what I think could reasonably be called a "counterfeit Apple store". Also, I am not aware of any evidence that many fake Apple stores are selling counterfeit products that look and function like genuine Apple products. Instead, most reports and my own experience suggest that the Apple products being sold at such stores are purchased from authorized Apple stores. The Apple Store in Hong Kong has been a particularly popular source due to differences in prices and availability of products, and it plays a role in China's extensive grey market (for other examples of grey market activities see here and here). See here for some examples of stores in Guangzhou who earlier this year openly stated that their iPhones come from Hong Kong (also includes many examples of stores in Hunan province and elsewhere in Guangzhou province). See here for a more recent example in a Reuters report from nearby Shenzhen.

So, although Apple certainly faces challenges in China, I don't think the "counterfeit stores" are effective for the point Romney was making. After all, those stores mostly appear to be selling genuine products purchased from Apple.

If Romney had his heart set on using a tech example to make his case, I think there would have been more suitable options. For example, an online service that is blocked by China's Great Firewall, such as Google's YouTube, could touch on the issue of fairness while also touching on another issue that can stir up American voters. Mentioning YouTube's situation could show Romney is concerned about the restrictions on free speech in China. It is also an example of where China's censorship leads to a playing field that is not level. After all, YouTube cannot expect to make much profit in China if it is blocked. China's Great Firewall is even helping Chinese companies get business from American companies (see here for one example related to YouTube). And if you think services such as YouTube are only blocked due to reasons of censorship, read here about a Chinese woman in Guizhou who thinks there are also economic reasons for Google's "problems" in China. Regardless of the reasons for the blocking, though, I think it is fair to assume that most American voters could be easily convinced (if they aren't already) that YouTube is not on a level playing field with its potential competitors in China.

However, some would largue that all is indeed fair in regards to YouTube and that Google just has to observe China's censorship laws. Well... if Romney is sensitive to such concerns, then he can mention another well known tech company. Microsoft could make a kadzillion* dollars if all the copies of its software in China were used under proper licenses and not pirated versions. The problem is so extreme that Microsoft has reportedly even had to make a formal request in China that several state-owned companies stop using pirated copies of Microsoft software (see here). And although there may be disagreements over the severity of the problem (at least in public statements), the Chinese government has openly stated it wishes to reduce software piracy. So even they appear to acknowledge (at least in their words) that there is a problem. Again, I think American voters would readily view Microsoft's situation as not fair. The only caveat that now comes to mind is any Chinese software company probably also faces issues with piracy in China. So I suppose one could say there is a level playing field in that regards. However, the problem has a much larger financial effect on American companies such as Microsoft, and no Chinese company faces a similar problem succeeding in the US.

So why did Romney mention Apple's situation instead of Google's or Microsoft's? I could speculate about reasons that relate to either Romney's interests (for example, he might think Apple is "sexier" to voters or he might have a very specific definition of "level playing field") or Google's and Microsoft's interests (for example, they may not consider it to be beneficial to resolving their China-related problems for them be publicly stated by a prominent U.S. politician) but... I think it is best to just say I really don't know.

Finally, I don't expect this critique to pose a significant setback for Romney. Although I was puzzled by his statement about a counterfeit Apple store and wanted to comment on it, American voters will likely be far more concerned about many other statements made during the debate.

Even those about binders.


*"Kadzillion" equals whatever amount Microsoft would make under such conditions.

UPDATE: Paul Mozur in the China Real Time Report writes that Jessica Angelson, the blogger who brought attention to the fake Apple Store in Kunming, "didn’t feel her find was being used properly" by Romney. Again, even though it was my first interpretation as well, at the moment I don't think it can be said that Romney's words definitely refer to the Kunming store. But even if they don't, the example would not seem to be highly relevant to his point. Maybe Romney will shed more light on this issue.


Disclosure: I previously worked as a user experience researcher at Microsoft China. All of the information and claims about Microsoft in this post are based solely on public sources (except for my newly-created word "kadzillion") and in no way represent "inside knowledge" on my part. The rampant pirating of Microsoft's products in China is well-known and easy to see.

Shark-Friendly Soup in Macau

Andrew Sullivan recently shared several pieces about shark fin sales covering topics ranging from the dispute over its ban in California to its strong market in Hong Kong. The eating of shark fins is an issue that has garnered much attention due to the practice of shark finning, where the fin is removed and then the shark is dumped back into the water still alive. However, not all shark fins are obtained through this process, and Sullivan mentions that "scientists and conservationists support managed fisheries over all-out legislative bans".

In a land rife with fake products, I have wondered how much of the shark fin soup sold in China actually includes genuine shark fin. So while walking around Macau last week this pot of soup sitting outside a restaurant caught my attention:

The value of advertising artificiality

Regardless of whether customers primarily order the soup due to concerns about the welfare of sharks or a desire not to pay the higher price for genuine shark fin soup, this seems to be yet another potential way to reduce shark finning.

Chickens may have some objections though.

Fake Stuffed Toys Influencing Technology Usage in China

During my several trips to Guangzhou in Guangdong province I have visited a number of large buildings full of small wholesale stores. The immense variety of what is sold makes it easy to believe that many of the world's products are manufactured in Guangzhou and other nearby cities. Such stores offer an opportunity to gain knowledge relevant to the design of various technologies. To provide a small taste of what I have found I will share an example of a single store. It highlights some important issues and at the end of the post I will allude to an intriguing question it raises about lands far from China.

The store's owner, who I will give the fictitious name "Jia", sells stuffed toys and other stuffed products based on animated characters. Her customers sell the items they buy in bulk to retailers or sometimes directly to consumers. Jia has an advantage running her business due to a close connection with the factory where the items are manufactured--her long-term boyfriend is a manager there.

There is an Internet-connected computer in the store that plays a critical role in taking orders from the customers, but not in the way one might first guess. Although some of Jia's customers may sell their merchandise online using services such as Taobao, Jia's store has no formal online presence itself.

Jia takes a call from a customer.

Some of the reasons why Jia has a computer yet no online store became clearer to me after I asked Jia, "Are your products genuine?"*

She replied, "Kind of."

One may think that whether something is genuine or not is a simple yes or no proposition. But fake products in China have a wide range of quality. Jia's "kind of" reply reflects that although her products are not genuine, she believes they are equal in quality and practically indistinguishable from genuine products.

The stuffed products include many Japanese animated characters found in video games, television or movies.

What Jia sells is significantly cheaper than genuine products yet more expensive than lower quality fakes. Furthermore, her customers are fully aware they are not buying genuine products. To be sure they are getting their money's worth and a product meeting their needs, they desire to visit the store to examine the products firsthand. While in the store, many customers photograph whatever they may buy. Later, they can send their photos to ensure the accuracy of any orders which they may place via email, instant messaging, or telephone.

There are other factors at play, but this example provides a window into how fake products can influence a business's and its customers' use of technology. Had Jia been selling genuine products or low quality fakes the situation may have been different. As it stands though, Jia's customers are motivated to visit the store, take photographs, and later send them via the Internet. And Jia is motivated to use a computer to communicate with customers but is far less motivated to set up a formal online presence for her store.

Understanding not just how people use technology but the deeper reasons for why they use it the way they do is critical to designing useful and desirable technologies. Although Jia's business is just a single example, it can provide inspiration for new ideas that would not have been conceived otherwise. By combining it with other examples or with findings from different forms of research, compelling evidence may be found of needs impacting a great number of people--both in China and elsewhere.

Research such as this never fails to fascinate me. As I have mentioned before, sometimes such research is conducted to answer specific questions, but it is also valuable for discovering important new questions. In fact, I left Jia's store with a new question that pertains to issues beyond just technology. After all, Jia was not always sure (or willing to say) what happens to her fake stuffed toys after she sells them--especially those she delivers to her good customers in Australia and the U.S.



*Yes, this is a leading question**. I had reasons to believe it was appropriate for my purposes (especially since I wanted to know whether Jia would be forthcoming in answering such a direct question). I believe some of its value in this case is indicated by Jia's atypical response.

**A "leading question" is a question that is asked in a manner that may bias the reply. Especially in research, avoiding their use can be very important, though they can have value at times if used appropriately. I hope to more fully discuss this issue in a later post someday.

When is a Fake Apple Store Fake?

[UPDATE at end]

Reader Justaguy left the following comment on my post about the large number of "fake" Apple stores in China: "More of the Same: "Fake" Apple Stores in Zhuhai, China":

How are these fake Apple stores? In order to be fake, they'd have to be presenting themselves as real Apple Stores - are they? Chinese stores use brands in their signs in ways that US stores do not. Whenever I've spoken to someone in a store with such a sign, they've never made any pretense to be in any way affiliated with Apple or whatever brand they have on their sign. They put it there to advertise what they're selling. While that might be an illegal use of a trademark (I'm no expert in Chinese IPR law, so I have no idea), or use of Apple's logo in a way that Apple doesn't approve of, its very different than a store misleadingly presenting itself as a real Apple store.

I considered these issues while writing the earlier posts and appreciate the opportunity to address them. Indeed, stores can apply the "Apple spirit" to a variety of degrees. At what stage does a store deserve being labeled as a "fake Apple store"? For example, take this store in Zhuhai with a very large Apple logo on its storefront:

The store is dedicated to Apple products:

And its business card prominently describes itself as "Apple" and the store name "创实数码连锁" (it also appears to go by the name "Choicy"):

Additionally, the store currently promotes itself with a remarkably familiar-looking website at www.zh-apple.com (catch it while you can (added note: for comparison, Apple's official Chinese website is here)):

The copyright is brilliant.

While I doubt the employees think they are working for Apple, I would not be surprised if they believe the store is authorized to sell Apple products (especially since their shirt sleeves said "Authorized Reseller"). As far as I know it is not.

So, is it fair to call this a "fake Apple store"?

My short answer is that I think it is fair but I really do not care what you call it. I think what matters is that there appear to be many examples of Apple's products being sold without authorization and of Apples logos being used improperly. As in many cases, there can be fuzziness in what deserves to be labeled as "fake". Hence, I have often used quotations marks around the word when I used it. Furthermore, one can distinguish between "Apple store" and "Apple Store". I have tried to be careful in my use of those terms. In my usage (and the usage of many others I have seen) the former simply refers to a store selling Apple products while the latter refers to the copyrighted stores officially run by Apple which can use Apple patented store designs such as the glass staircase. Although none of the stores I have shared are as grand as the notorious store in Kunming described by BirdAbroad, it seems reasonable (especially for convenience) to call the offending stores "'fake' Apple stores". In most (if not all) cases though, I would refrain from labeling them "fake Apple Stores".

Finally, regarding Justaguy's comment "Chinese stores use brands in their signs in ways that US stores do not." I will simply say that many clothing stores, banks, restaurants, etc. use storefront signs in a manner consistent with what is found in many other countries. I could cite numerous examples, but perhaps two are particularly pertinent. First, here is an authorized store in Zhuhai for Meizu, a Chinese brand of mobile phones:

Second, here is the only store in Zhuhai listed as authorized on Apple's website:

Although I would agree that many mobile phone stores use brands in their signs in a manner that U.S. stores would not, many businesses in China do indeed place a proper identification for the store on the storefront sign. That being said, I would be interested to see the results of a carefully designed research study examining how "fake" signs are perceived by Chinese consumers.

But that is another story.


Added note: Yes, the title of this post was deliberate and I realize it could invite a variety of constructive comments. Feel free to send them if you simply desire to add to my amusement.


UPDATE: For more about "fake" Apple stores in China see: "More 'Fake' Apple Stores In China: Does Apple Care?"

Or tired of seeing "fake" stores? Then maybe the Chinese mobile phone with an apple logo in this post will interest you: "Insights and Headaches for Apple: The iPncne in China".

A Long Trip for Milk: Barriers, Trust, and Truth in China

During my visit to the top of Guia Hill in Macau I met someone new:

We met while we were both exploring historic Guia Fort. He lives in mainland China and was visiting Macau for the day. One topic he mentioned during our wide-ranging chat was the Internet censorship enabled by China's Great Firewall (which does not operate in Macau). He said it does not affect him as much as some of his friends since he works at a Taiwanese company which uses a VPN to securely (and freely) access the Internet. Regardless of his own situation, he believes the Great Firewall is unfortunate and should not exist.

In addition to the Great Firewall, there is another barrier in China that bothers him -- the borders between mainland China and China's special administrative regions of Macau and Hong Kong.

Pass (通行证) required for mainland Chinese to enter Macau or Hong Kong

Despite possessing the passport-like pass mainland Chinese need to enter Macau, for each visit he must apply for a new visa-like permit to be placed in it. As with China's Great Firewall, he wants the border removed and believes it is not fair to mainland Chinese.

What most caught my attention was what brought him to Macau. Although he enjoyed seeing the sights, his primary goal was purchasing the customs maximum two cans of New Zealand baby formula. Like cigarettes and diapers, baby formula is a common product brought to mainland China by those coming from Macau. Due to past milk scandals his cousin with an infant does not trust the milk products produced in China. Approximately every two months he plans to take a more than hour-long bus ride from the city where he lives to the Macau border, pass through two immigration channels, purchase baby formula, pass through immigration again, and take another long bus ride back home -- all in one day.

I asked him why he did not save himself the trip and purchase the New Zealand baby formula through a source closer to his home. He said his family would not be able to trust its origin due to the vast numbers of fake products found in mainland China. When I asked him why fake products were such a problem he replied, "The Chinese government often lies to the people. So, the people..." He did not finish the sentence and simply looked away with an expression I am hesitant to interpret. I will just say that it did not at all appear to be positive.

He may not agree with some of China's policies. He may be wary of China's milk. He may not trust all of what he hears from China's government. But despite his frustrations, his story does suggest signs of positive recent changes in China. He was doubtful he would have as easily obtained a permit to visit Macau only 10 years ago. And I am not sure whether 10 year ago he would have as openly expressed himself or he would have given permission to publicly share his thoughts with his photo included.

Regardless, he feels conditions still need to improve for himself and others in China. And sometimes he is willing to take a long journey to help it happen.

Amazon in China: A Clear but not Always Affordable Choice

In the previous post about my trip from Guangzhou to Zhuhai I mentioned that I needed to wait an additional 30 minutes to catch a train. The extra time was well spent, though, due to meeting this pair of young women in their mid-20's:

Outside Guangzhou's South Train Station

We met because they asked me to take a photograph of them together with one of their cameras. Afterwards, we chatted about a variety of topics.

During the conversation, the person on the right side of the photo mentioned Dangdang, a Chinese electronic commerce company. One of its competitors in China may be more familiar to those outside of China, Amazon.com. It was relevant to some research I have done, so I asked her about her perceptions of the two services and how much, if at all, she used them.

She said that when she had been in college she always used Dangdang and almost never used Amazon's Chinese website. The reason was simple -- price. As a college student her funds were particularly tight and the lower prices she found on Dangdang were a very important factor in her choice of book sellers.

However, now that she has a job and is making money she is more likely to purchase her books from Amazon.com despite still finding their books to be more expensive. The reason she is willing to part with more of her hard-earned money is that in China it is possible to buy paperback books of varying quality. Now that she can afford it, she said she buys books from Amazon because she has found they sell better quality books which are easier to read than the books she has bought from Dangdang.

I have not personally compared books from Dangdang and Amazon, but based on the quality of other books I have seen being sold in China I could appreciate her comments. Especially for books that are not likely legal copies, such as those often sold at the mobile bookstores I mentioned last year, the paper and print quality can be very inferior (there can be varying degrees of quality). Sometimes, the blurriness of the print adds a noticeable strain to reading, pages stick together, or the print easily smudges.

Another reason she shops at Amazon now is that Amazon is cheaper than another alternative -- buying equal quality books at brick-and-mortar bookstores. While she is happy to be making money, she feels it is very little and is motivated to find ways to save on her book purchases as long as quality is not sacrificed.

A final and very key element to her choice of Amazon is "trust". She knows the books will arrive quickly and that they will be the best quality possible.

Of course this is just a single case and based on her self-reported behavior and perceptions. And I have come across some very different opinions of Amazon elsewhere in China (possibly a post for another day). Regardless, this captures some key themes I have repeatedly seen in China.

The evolution of this woman's shopping habits is of particular interest to me because being able to buy lower quality paperback books is not a typical option in countries such as the U.S. (used books are another story). The difference touches on an issue important for companies such as Amazon to consider: the value they can provide in China may be different from what they provide in other countries.

The issue of "trust" also caught my eye. For now, I will just say that it takes on a very special significance in a country where fake or poorly made products are easily found. While some companies are negatively hurt by fake/imitation products in China, it also presents a key opportunity that I think many are failing to fully seize (again, a post for another day).

Price, quality, and trust. Important factors all around the world, but they can play out in their own special ways in China. And for this particular woman's book needs right now, Amazon has hit a sweet spot.

"Fake" Apple Stores in China

A "real" Apple Store in Shanghai

Last July, an American living in China wrote on her blog, BirdAbroad, about a store in Kunming, Yunnan province that in many ways looked liked a genuine Apple Store despite the fact that it was not. While some people found the story so incredible that they pondered if it was a hoax, for some in China it came as no great surprise. "Fake" can be rather common in China. In fact, just in Kunming alone police later found 22 stores "unlawfully using Apple's brand and logo". But as noted by Josh Chin on The Wall Street Journal's "China Real Time Report", the store highlighted on BirdAbroad was a jewel specimen showing the lengths some would go.

I've come across a number of "Apple stores" in a variety of other cities in China. None of the stores were on the scale of the one in Kunming, but they help paint a broader picture of the environment in China for a brand such as Apple. In that spirit, I'll share some of what I've seen in 3 of the cities I've most recently visited. For a number of the examples I'll share, I discovered them purely by chance as I walked around exploring the cities. Others where found when I deliberately visited certain shopping districts, though not because I knew I'd find stores selling Apple products there. Especially given that I wasn't deliberately seeking out such stores, I suspect that what I'm sharing is just the tip of the iceberg for these cities. To be clear, for some of the examples I can't be absolutely sure anything improper is occurring. But based on what I know and the example of the store in Kunming, there is certainly much that should at least raise some eyebrows.

Before sharing any examples of questionable sales of Apple's products or uses of its trademarks, I want to clarify one issue that I've seen cause some confusion. In addition to its official Apple Stores in China, Apple also allows select businesses to be official Apple resellers. Some of these stores only sell Apple (and Apple-related) products. Even in Shanghai where three large Apple Stores currently operate there are also numerous authorized Apple resellers where one can purchase Apple products. Here is a photo of an authorized Apple Reseller at a large shopping mall in Guangzhou, Guangdong province that is similar to many others I have seen:

Sunion is a common Apple reseller in China. I'm sure this store is legitimate not only because of the "Premium Reseller" sign prominently displayed (which of course could be faked) but also because this specific store appears on Apple's list of authorized resellers in China. While official resellers often have some of the look and feel of an Apple Store, as referenced by Loretta Chao and Sue Feng (also on The Wall Street Journal's "China Real Time Report") there are guidelines they must follow. I'm not absolutely sure if this is part of the rules, but it's worth pointing out that the above store's name does not include "Apple" in it. Also, the employees wore shirts with "Sunion" written on them - not "Apple" or an Apple logo as was found in the now famous store in Kunming.

So, as far as I could tell all looked good there, as in many other authorized stores in China.

However, in the very same mall as the store above I saw a number of other stores also selling Apple products. None of them currently appear on Apple's list of authorized resellers. For example, there was this store with "iPhone 4" displayed where a store name is typically located:

An "iPhone 4" store

To provide some context, this section of the mall had numerous stores with their apparent "real" name posted in the same relative location above their main entrance. This store's business card did not indicate "iPhone 4" and instead provided a nondescript Chinese name for the business. The store sold a variety of Apple products such as iPhones and iPads. In addition to the Apple-like feel of the store, I also noticed PC monitors which did not appear to be Apple products with stickers of Apple's logo on them. You can see a hint of one in the photo.

Also of relevance is the logo in the red sign on the left side of the picture. It's China Unicom's logo for its WCDMA 3G Network. China Unicom has an agreement with Apple that allows it to sell iPhones. China Unicom also has an online list of dealers and currently this store is not listed there either. Even if the store should be on the list, its sales of non-iPhone products, the choice of the displayed store name, etc. remain issues.

There were other stores selling Apple products, many also with Apple-labeled PC monitors. And some stores weren't content with naming themselves "iPhone 4", but instead chose "iPhone 4S":

An "iPhone 4S" store

iPhone, iPhone 4S, and Android too

The use of "iPhone 4s" was particularly fascinating since the iPhone 4S hadn't been authorized for sale in China when I visited any of these stores. In fact, its launch date is this Friday, January 13. So, what's the source for these phones which shouldn't be available in Guangzhou?

I spoke to assistants at several stores and they all told me the same story: the phones are purchased from nearby Hong Kong and brought to Guangzhou. They were very open about the source of the phones and one shop even had a sign stating the Hong Kong origin of the iPhone 4S phones:

When I asked an assistant at the authorized Sunion store whether I could purchase an iPhone 4S she told me it would not be possible since they weren't available for sale in China. When I asked her why the other stores in the same mall already had them available she looked disgusted but refused to comment.

So, these examples are from just one mall and more exist there than what I've shared here. If you think that's a lot of iPhone stores to peruse in a single mall I can recommend you also visit the Starbucks a few levels below them (which I assume is genuine). Anyways, this is just a small taste of what you could likely find in Guangzhou. In other parts of the city I also noticed several stores with signs indicating they were authorized Apple resellers despite these stores not appearing on Apple's online list.

Is this store really authorized by Apple?

Maybe Apple's online list is not up to date. I did not contact Apple to check.

The examples from Guangzhou are striking, but it is one of China's more developed cities and may not be representative. What can be found in less prominent cities? Hengyang, Hunan province was another city I recently visited, and it provided a number of intriguing examples as well. Here's one store with an Apple logo prominently displayed:

It actually sold a broad variety of phones, but there was also a store nearby that focused on Apple products:

This store sold iPhone and HTC products:

Inside of the store

And this store claimed to be an authorized reseller:

Now here's the kicker. Apple doesn't list one single authorized retailer in all of Hengyang. China Unicom does list one authorized reseller in the area I visited, though the address doesn't appear to be for the store above.

After Hengyang I visited Chenzhou, also in Hunan province. I should note that like Hengyang when I visited Chenzhou I hadn't expected to be taking photographs of stores selling Apple products. However, one day I was walking down a street and saw these stores all in close proximity to each other:

Get the point? And like Hengyang, Apple lists no authorized stores in Chenzhou and none of these locations are currently listed on China Unicom's site. Again, some of the stores might simply be missing from the lists.

All of the stores above from Guangzhou, Hengyang, and Chenzhou were very much out in the open and in highly-trafficked areas. Never did anyone ask me to not take photographs. In fact, in several of the "iPhone" stores employees were happy when I asked if I could take their photos. While they might not have thought they were really working for Apple as in the case in Kunming, I didn't get the sense that they had a feeling there was anything they might not want to be fully public.

So, it doesn't appear that Kunming is the only city with "creative" uses of the Apple brand, and I feel pretty safe in saying that Guangzhou, Hengyang, and Chenzhou are not unique in joining Kunming in this respect. Again, I'm not saying I'm sure that everything I've shared here is "bad", but there is certainly much that seems amiss. Perhaps most clear is that the sales of the iPhone 4S should not have been occurring.

All of this presents a mixed case of good and bad news for Apple. At least if the stores are selling genuine Apple products (which is another issue to explore) then presumably Apple is at least profiting from the sales, even if not in the manner they would like. It's a very different problem than what Microsoft faces with many people in China using pirated versions of Windows.

So while there are numerous locations in China where one can legitimately purchase Apple's products, it appears there may be many more locations where sales are less than proper. Whatever benefits there may be for Apple in reducing the number of "fake" Apple stores in China, there would mostly likely exist direct benefits for the properly authorized (and presumably Chinese-owned) reseller stores.

And by the way, I've noticed some other retailers who are indeed very careful not to improperly use Apple's logo or its products' names:

On a sidewalk in Chenzhou

They just sell products that look remarkably like Apple's -- but for much cheaper of course.