Counterfeiting in China

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China has been undergoing rapid economic growth since the adoption of its open door policy in 1979 . It keeps showing the world its enormous potentials in market economy. However in the recent decades, there has been increased awareness of unethical business practices in China. The production and purchase of counterfeiting goods has been one of the major issues. The International Chamber of Commerce (2004) estimates that 7 per cent of world trade is in counterfeit goods, and China has built a reputation as the source for such products . The conduct of counterfeiting can causes seriously social, economic and political problems. For example, studies have shown that counterfeit goods lowers consumers’ confidence in legitimate brands and company reputation, impacts upon consumers’ perception of genuine articles, and poses potential threat to consumer health and safety. Every year Microsoft loses nearly $10 billion due to software piracy. Hundreds of medical accidents due to the mistaken of counterfeiting drugs happens in China every month . Given the widespread effects of counterfeiting products, many researches have been done to investigate the reasons that why there are so much counterfeits in China. Most of these studies are related to supply side, suggesting that the desire for excessive profit and lack of the independent innovation are the major reasons for these activities. Also insufficient protection for Intellectual Property from the government worsens the situation by given an easy pass for counterfeiting industries . However, consumers are the actual force behind this trade. Even if the government and enterprise control counterfeit sales through the various measures in short time, because of the existence of counterfeit market demanding, consumers will also look for counterfeit products though all kinds of channel. So to understand the counterfeiting problem from the angle of consumers’ intention to purchasing counterfeit goods is crucial to solve it. The culture related characteristics of being less sensitive to unethical issues, more inclined to relativism and terminal materialism and higher vanity are the key reasons breed unethical behaviors of Chinese consumer in recent decades. Consumer ethical belief

To understand the ethical standard of consumer, the ECS ( Consumer Ethics Scale) developed by Muncy and Vitell is the common method through questionnaire to measure consumers ethic . This measurement includes four dimensions. The participants are asked to choose from ‘strongly believe that the statement is wrong’ to ‘strongly believe that the statement is not wrong’ using 5 points Likert scale under each dimension. The first dimension is called ‘Actively Benefiting from Illegal Activity’. The actions identified in this dimension are generally regarded as illegal and initiated by the consumer, such as drinking a can of soda in a supermarket. The second dimension of ‘Passively Benefiting at the Expense of Others’ describes a consumer’s behavior when the consumer takes advantage of the seller’s mistake, such as getting too much change and not saying anything. The third dimension of ‘Actively Benefiting from a Questionable Action’ means that the consumer is actively involved in an action that may not be necessarily perceived as illegal. Most of studies include the purchasing of counterfeiting products in this category. The fourth dimension of ‘No Harm/No Foul’ means that the consumer perceives that the consequences of his or her actions produce little or no harm and, in this way, they are considered permissible. Through this method, Neo eta., Shen eta. and Wendy eta. have shown in their papers that Chinese consumers have high scale in ‘Actively Benefiting from a Questionable Action’. This dimension is specific associated with purchasing of pirated goods and the results are showing that mort Chinese consumer do not think that buying counterfeit products is an unethical thing to do. This could be because that...
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