Market needs rule of law

The media recently exposed two bases for the selling of counterfeit goods on the same day. One was a shopping mall in Putian in East China’s Fujian province, which was found to be selling counterfeit shoes, cellphones and invoices among other things, the other was in the town of Duliu, in North China’s Tianjin, where manufactures were producing counterfeit condiments.

Duliu, which is known as a “vinegar town”, has been home to dozens of workshops producing counterfeit condiments for a decade and it reportedly has a production volume of about 100 million yuan ($14.50 million). After the media reports, Tianjin’s Party leader Li Hongzhong vowed to crack down on Duliu’s bogus condiments for the sake of a healthy and benign market order, people’s food safety, and protection of intellectual property rights.

People cannot help but wonder why such counterfeiting chains that have been in operation for decades have not been smashed before. Some cite market demand as a defense. However, people’s sensitivity toward the higher price of genuine branded goods does not excuse fake ones. Given that the market economy is essentially a rule-of-law economy, the production and selling of counterfeit goods obviously violates market rules.

Putian and Duliu should have taken advantage of their industrial foundation and traditional craftsmanship to push for industrial transformation and upgrading and consolidate their brand influence. Regrettably, the two have chosen a diametrically opposite path by developing themselves into two bases for manufacturing counterfeit goods. The existence of enterprises that profit from making lower-cost fake branded goods also highlights the lack of effective supervision over market players.

Better law enforcement could have forged a healthier market order. Putian and Duliu demonstrate that delayed efforts to promote the establishment of a rule-of-law market environment are hindering the country’s efforts at industrial transformation and upgrading.