The Magazine

Faked in China

Counterfeits “R” Us.

Aug 15, 2011, Vol. 16, No. 45 • By JONATHAN V. LAST
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Could a place the size of a Foxconn City make enough ghost products to stock fake Apple Stores with real Apple products? Could someone on the inside help someone on the outside make working counterfeits? Is it possible that counterfeit stuff being made in one Chinese sweatshop is barely distinguishable from the real stuff being made in another Chinese sweatshop? Is the only meaningful difference who gets fat off the markup?

And what do you call counterfeiting when it’s corporatized? In 2006 a legitimate Chinese automaker, Huanghai Automobile, unveiled an SUV that was a near-copy of the Hyundai Santa Fe. The following year, Huanghai released a model that took the front end of a Pontiac Torrent and spliced it to the rear end of a Lexus RX. By which I don’t mean that Huanghai was inspired by these vehicles the way the Nissan Murano has lines reminiscent of the Porsche Cayenne. I mean that when you look at the Huanghais, it’s clear they actually copied the other cars, piece for piece. Are the Chinese cars real? Fake? Or something else altogether?

That’s not the only way corporations use fakes. Last year the Pentagon discovered that counterfeit electronics from China had worked their way into Missile Defense Agency hardware, weapons systems, and even onboard some F-15s. How? The Department of Defense contracts with suppliers, most of whom subcontract out components they use in final assembly. These primary suppliers might work with a “legitimate” Chinese business to order, say, 50,000 microprocessors. But when they take delivery of the shipment, some small percentage of the microprocessors often turn out to be of substandard quality from a fourth-party source. Or what we would have once called fake. Except that it’s being sold and delivered by the “genuine” company.

Once, it was hard to tell a good fake from the real thing. Today, it’s hard to know what makes the real thing real in the first place.

Jonathan V. Last is a senior writer at The Weekly Standard.

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