China's Olympic Turnabout on Knockoffs

Counterfeit mascots are displayed at Beijing's commerce administration. (By Teh Eng Koon -- Agence France-presse Via Getty Images)

At Yiwu, located south of Shanghai in Zhejiang province, unauthorized key chains, toys and cellphone lanyards are easily bought under the table; they can be shipped domestically or overseas. Searching online, buyers can find a host of fake Olympics merchandisers that can ship quickly and in bulk.

Those merchandisers are eager to sell. But many of them are now expressing greater caution.

"We only deal with familiar customers because the government has increased their spontaneous inspections," said one shopkeeper here, inviting customers closer into her narrow stall as a package of mascot phone lanyards arrived. "These are just like the Olympics mascots, but their eyes are a little different. If you want it exactly the same, you have to order a large quantity."

Two floors below her shop, Wang Lichun, the owner of a local toy company, explained how easy it would be to make counterfeit mascots, even as he insisted that he wouldn't risk doing so. He said that Junyao, the Shanghai company authorized to make official Olympics mascot stuffed animals, cannot make enough of the toys itself.

"They don't have their own factory, so they subcontract, and if the subcontractor can't meet the three-month delivery deadline, he subcontracts to a third layer, giving them the molds and telling them how many to make," said Wang, answering calls in a shop filled with pink velour monkeys and leopard hand puppets.

Junyao cannot control how many stuffed animals its subcontractors make, Wang said. "When they have leftovers, if I am a vendor and I know someone at the factory, I can get the mascots. They're real, but they're not authorized."

"If I want to, I can make the mascots even better than the originals, but I don't have the certificates guaranteeing their authenticity, so I'm not allowed to," Wang added. "They might fine me a lot, so it's not worth it."

Counterfeit mascots were produced almost immediately after the government unveiled the official versions in November 2005. For a time, fake versions of Beibei the Fish, Yingying the Tibetan Antelope and Nini the Swallow, as well as Jingjing the Panda and Huanhuan the Olympic Flame, were easily found at Beijing subway stops. Now, in the capital, they are harder to spot.

"When the authorities feel more pressure from America, they can do it, they take it seriously," said Pedro Ren, the owner of an import-export company, whose business card is in English and Spanish.

Last month, the head of Beijing's intellectual property office said the agency was doing all it could to combat counterfeiters but admitted that online vendors of fake merchandise, who are harder to identify, pose a special challenge.

"For infringement, especially online, it's a daunting challenge faced by the whole world. Although we don't like it, it's a fact," said Liu Zhengang, director general of the office, speaking at a news conference. "We cannot guarantee there's no infringement, we can only just keep prosecuting cases."

Officials said they had stepped up the training of customs officers in identifying genuine labels and strengthened controls at China's ports.

Ren, the import-export trader, said officials were generally taking a greater interest in protecting intellectual property, in hopes of encouraging entrepreneurs to create their own brands while assuring them that those brands will be protected. But the Olympic Games provide another incentive.

"The Chinese government usually only manages during a crisis," Ren said. "When things reach a peak and they have to deal with it, they will."

News researchers Julie Tate in Washington and Liu Liu in Beijing contributed to this report.