Some positive development, but … It is impossible to talk about the scourge of commercial piracy and counterfeiting (see this column in yesterday's edition) without speaking about China, which is at the centre of the problem. There is no shortage of positive developments: firstly, the Chinese authorities seem to be more and more committed to combating counterfeiting; secondly, the number of counterfeit goods of Chinese origin seized by Community Customs has shown a clear increase, which would seem to suggest that monitoring is more effective. But the reality is not quite so clear-cut. It is in its own interests for China to support respect for intellectual property, because more patents are now taken out in China than anywhere else in the world; its good intentions have to be checked. In the meantime, the famous shopping centres in Beijing which sell millions of counterfeit articles remain open, and, in the vastness of China, industrial or small-scale operations specialising in counterfeiting continue to operate. As for the increase in seized goods, this could quite simply be explained by an increase in counterfeit goods entering the Community. Experts on the ground say that the goods seized represent only a small proportion of this growing traffic.
I return to the attitude of the Chinese authorities. Every negotiator, whether at national or European level, speaks of their desire to cooperate. But at the same time, the New Silk Market continues to shine in the centre of Beijing, right opposite the Twins Mail building: with eight floors, 28,000 square metres of shops, it is the third most popular destination for tourists, just behind the Forbidden City and the Great Wall. Only counterfeit goods and imitations of “names” are to be found here, at prices so low that the careful visitor can easily save the price of the flight (even from Europe) and hotel bill. A journalist investigating even found a Louis Vuitton purse, for which there was no original: the Chinese imitator had become a creator. This is not difficult to believe: local designers are certainly capable. What is inadmissible is that it was sold as a Vuitton. In luxury goods, the main victims of counterfeiting are the large European companies which relocated a significant part of their production to China. It's logical. The knowledge and production methods having been transferred, and the Chinese having learned to produce originals for the European company, it is not surprising that these new skills were used to produce copies. This should have been realised beforehand, instead of just thinking about reducing production costs.
Who benefits from these relocations? The current situation is transitory. The time is coming when the Chinese will not need to copy goods and falsify labels: they will be able to do it all for themselves. In some areas, this has already happened: China is the world's number one exporter of personal computers, with their prices much lower than others. That is why, under current conditions, I do not believe there is any advantage to be gained from transferring part of European production to China. Fashion kings make a killing: they save money, sometimes a lot of money, but the European economy derives no benefit whatsoever. Major industrial investors imagine that they will conquer the huge Chinese internal market. But prices on this market are very low and those European and American car companies, for example, which have made the leap are making losses (apart from a few luxury models). In contracts, the Chinese demand access to the technology; they quickly master it and rapidly learn to produce anything themselves, with their own makes, and always cheaper. This is already the case for household electrical goods, other sectors will follow.
Tackling other factors of distortion. It seems obvious to me that Europe, while continuing to fight counterfeiting and piracy (or rather putting up a more serious and effective fight: see this column in yesterday's edition), should also tackle the other factors that distort competition, such as undervaluing the currency, and working conditions. The WTO, OIT, even the IMF, have to be called on to work together. New strategies have to be defined.
Peter Mandelson is thinking about it. He has announced for the second half of the year three European Commission communications on specific relations with China and aspects of trade policy in general. I will return to this tomorrow, with reference to the development of the Doha Round.
(F.R.)
Plenary session of the European Parliament