For Chinese consumers, a superhero
BEIJING — To Wang Hai, every shopping trip is an opportunity to catch a vendor hawking faux Fendi bags. Or, even better, bogus Audi cars.
Part Pinkerton, part Ralph Nader, part Donald Trump - Mr. Wang is China's "fake-fighting hero." He's a champion of consumers who is paid handsomely for his do-gooding: A law here promises double your money back on goods that are less than they purport to be.
For someone with Wang's expertise, it's like fishing in a barrel. By some estimates, 1 of every 3 items purchased by Chinese consumers is counterfeit - a cheap knockoff.
Since 1998, largely in response to complaints from foreign companies and Western trading partners, the government has sporadically cracked down on everything from smuggling to piracy.
But on the streets, Wang still has plenty to keep his crusade going. In fact, the soft-spoken high school dropout is considered by some to be the founder of China's embryonic consumer movement.
"In a sense, Wang Hai started the whole thing called consumer rights in China, and made government officials aware of the power of consumer rights," says Shi Duanshi, a former journalist now working for an American company. Because it's not a political issue, Wang has been able to openly criticize the government while promoting the rule of law, Mr. Shi says.
Wang began his battle for consumer rights in 1995, just after the government published its first consumer-protection regulations. Then a salesman taking a correspondence course in law, Wang decided to test out Clause 49 after he bought a pair of fake Sony earphones at a department store. Eventually he won his case - and his money back - along the way gaining nationwide notoriety and deciding that nailing phonies would be his goal.
For two years Wang traveled and bought fake goods in bulk and then demanded compensation from store owners. Soon, Mr. Wang trained his attention on the producers as well. He took to wearing dark glasses after receiving death threats from some of his adversaries.
In 1997, he founded Beijing Dahai Consultants, whose 200 investigators around the country are organized "underground-party style," as Wang says. Day jobs hide their true identities. They investigate intellectual-property theft cases for big-name clients as well as perform public-service work. High-profile recognition came in 1998, when Wang met visiting President Clinton as part of a roundtable forum in Shanghai.
"Consumer rights are a major part of human rights," Wang says. "If Americans care about Chinese people's human rights, they also care about consumer rights. And if you care about consumer rights, you have to care about me."
Of course, while making the world safer for consumers, he has lined his own pockets. "Yes, I'm not ashamed of making money," he says. "People think if you work for the public interest, you have to sacrifice yourself. I think that's wrong. I'm part of the public. Therefore, I'm working for myself."
He's got his work cut out for him. Advocacy groups say that companies lose tens of billions of dollars in legitimate sales to counterfeiters, and the government loses billions in unpaid taxes.
In some wholesale markets "the only thing that's real are the fake flowers," says a local investigator who asked not to be identified. One company from Jilin Province was recently accused of selling $1.7 million worth of fake Audis put together from scrap car parts. Some towns have based their entire economies on specializing in bogus goods, such as cosmetics or music recordings. Industry analysts say 90 percent of software used in China is pirated. And illegally copied CDs and video CDs are sold openly in stores.
The central government has been getting serious about cracking down on piracy, consumer fraud, and producers of shoddy goods. But with the economy slowing down and unemployment rising, local authorities are loath to close down any kind of business that keeps people employed and often ignore central edicts.
That disregard has had a high price. According to the government, 69 people died last year after eating foods sprayed with banned pesticides. Shoddy construction practices have been blamed for scores of deaths. Every year, dozens die from exploding beer bottles and methanol- and lead-tainted alcoholic beverages.
Beyond these serious consequences for the population, China faces long-term economic effects if the situation continues unchecked, analysts say. With no guarantee their products won't be copied, companies are reluctant to enter China's market.
Yet "There is definite progress," says Mitchell Presnick, head of the lobbying group APCO in China. The government has taken steps beyond the crackdowns, such as founding the the China Consumer Association in 1984, and later passing a series of consumer-rights laws. In 1997 it signed an international treaty on protecting intellectual property. March 15 has been set aside as Consumer Rights Day.
It remains an uphill battle. But Wang himself offers some perspective: Copying is a stage in China's economic development, he says. Most authentic, high-end branded goods are too expensive for Chinese to buy, creating a ripe market for anyone supplying fakes. Another factor he cites is the lack of restraints. Government enforcement is lax, and there is a moral vacuum caused by the ideological bankruptcy of Communism and the weak hold of religion.
"A person with a good moral code would think twice about doing something bad," he says.
Now, Wang's own ethics are under question. He's battling accusations that he accepted bribes from a company that wanted him to target a competitor. Wang says he was set up by a company seeking revenge for an expos.
But Wang doesn't seem worried. As he's often been quoted as saying: "I'm a hooligan. I'm not afraid of anyone."
(c) Copyright 2000. The Christian Science Publishing Society