CSI Professor Alan Zimmerman was invited to speak before the United States International Trade Commission (USITC) last month to discuss the economic impact of the sale of counterfeit goods in China.
In his talk entitled “Protecting International Property Rights: The Special Case of China,” Zimmerman focused on how the counterfeit market in China adversely affects sales of genuine goods in the U.S. The talk, based on the book, The Economics of Counterfeit Trade: Governments, Consumers, Pirates, and Intellectual Property Rights, co-authored by Zimmerman and Prof. Peggy Chaudhry, pinpointed specific issues of counterfeit trade, namely the level of consumer complicity and extent of the host country’s enforcement of intellectual property (IP) laws.
The size of the Chinese counterfeit market is vast, 93% of the potential market for the film industry is lost to counterfeiting as well as 25% of health care goods. The most damage is done through business software piracy, which accounts for nearly 100% of software used in China. “The Chinese government recognizes this issue as a major problem and they are working hard to improve the situation,” says Zimmerman who is currently visiting China to continue his research.
At the USITC, Zimmerman primarily focused on his findings from a researcher’s lens, but he also defined certain situations in China that helped breed the sale and consumption of counterfeit goods, such as the lack of enforcement of IP laws. Zimmerman also touched on Chinese history and philosophy in pinpointing the obstacles that legitimate brand holders must overcome, outlining one major historical pillar of Chinese belief, “individual inventions draw on past knowledge, which belongs to all citizens.”
The USITC is an independent, quasi-judicial Federal agency with broad investigative responsibilities on matters of trade. The agency investigates the effects of dumped and subsidized imports on domestic industries and conducts global safeguard investigations. The Commission also serves as a Federal resource where trade data and other trade policy-related information are gathered and analyzed. The information and analysis are provided to the President, the Office of the United States Trade Representative (USTR), and Congress to facilitate the development of sound and informed U.S. trade policy.
Alan Zimmerman is a Professor of Business and Area Coordinator for the International Business program at CSI. He teaches Global Strategy and Business-to-Business Marketing for the Master’s program. He has co-authored three books on international business.