Discussion for Awareness of Imitation Products in Chinawrbrpapers.com/static/documents/March/2018/5....

World Review of Business Research

Vol. 8. No. 1. March 2018 Issue. Pp. 53 – 68

Discussion for Awareness of Imitation Products in China

Katsuhiko Nakajima*1, Luo Fan** and Hiroshi Kawaguchi***

The Imitation issue is an important management risk for Foreign Direct Investment Japanese companies in China. The economic impact of Imitation Japanese products in the world was up to 1,001 billion yen (in 2012fiscal year), and 67.8% were from China. China's intellectual property right issue is likely to be impacted by Chinese citizens’ moral issues rather than legal ones. This research interviewed 203 Chinese citizens of Shanghai and Wuhan, and analyzed the results with Chi-Square Test. This research revealed what is their purchasing behavior and perception of the imitation goods. With analyzing the Chinese moral, the imitation counter measures are proposed.

JEL Codes: F23, K11 and M16

1. Introduction In the last several years, Chinese law on countermeasures against counterfeits has gradually developed and been enhanced. Administrative enforcement and judicial protection agencies all over the country have strengthened the crackdown on Intellectual property right protection. Its enforcement and efficiency has greatly improved. However, slipping through this crackdown, the other new ways of imitation goods and intellectual property rights infringement has been spread. It is true FDI Japanese (FDIJ) companies have still been plagued by imitation or Intellectual property right infringement. For intellectual property rights of China, discussion of the actual situation or the legal issues have been seen in a number of reports or research papers, but, there are few that have studied it from a Chinese citizen’s perspective, or studied it considering the differences between the districts. A part of the past research (e.g. Naoki Yamaguchi, 2006) states the importance of citizen's awareness of it, but a public opinion survey has not been carried out. In considering the protection of intellectual property rights, it is very important to consider the citizen's recognition of intellectual property rights. The understanding of a citizen's perception is the result of the country’s’ laws, control, and enlightenment, and it gives great hints on a future response. This research focused on Chinese citizen’s perception to intellectual right (Imitation goods) to reveal their purchasing behaviors of imitation. This research objective is, through Chinese citizen’s awareness survey, to study the causes and countermeasures for intellectual property right infringement in China. ___________________________ *Katsuhiko Nakajima, School of Management, Wuhan University of Technology, China, Email: [email protected] **Luo Fan, School of Management, Wuhan University of Technology, China, Email: [email protected] ***Hiroshi Kawaguchi, Geo Business Consulting Co. Ltd., Japan, E-mail: [email protected] To precede this research, three assumptions have been composed.

mailto:[email protected]



Nakajima, Fan & Kawaguchi

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Assumption 1: The reason for the infringement of intellectual property rights

(counterfeit goods) in the Chinese market is weak perception of Chinese

citizens' intellectual property rights.

Assumption 2: Awareness is different in Chinese citizen demographics

(gender, income, status, occupation, age, region).

Assumption 3: Chinese citizens have their own reason to buy counterfeit

goods. According to the results of this research, about 57% of Chinese citizens are aware of intellectual property rights. That number jumps to 91.67% if including "I have heard” responses. Furthermore, 38% of Chinese citizens understand that counterfeit is a violation of the law. In this research, the recognition and thinking tendency of Chinese citizens for intellectual property rights were broken down by income, occupation, gender, region, or age. Therefore, the results of this research will contribute the intellectual property protection activities of overseas FDI companies as well as FDIJ companies planning business development in China and will promote foreign companies their direct investment in China. Past research was often conducted to interview the firms suffering the intellectual property rights damage. While the research focused specifically on Chinese citizen purchase behavior like this research has been extremely rare. This research identifies that it is very important and valuable to consider countermeasures against

the intellectual property right infringement problem in China. This research report begins with literature review and explains the survey methodology, survey results, and summarizes factors influencing Chinese citizens' counterfeit purchase behavior. Based on the results, the countermeasures against counterfeiting for FDI companies in China are proposed.

2. Literature Review According to the Patent Office of Japan (2014), by research of 8,081 Japanese companies in the 2012 fiscal year, the average amount of damage was 190 million yen per company in the 2012 fiscal year, and the total imitation damage has reached 1,001 billion yen. Their economic impact of the intellectual property infringement in China, South Korea and Taiwan are still higher level in the world and it is especially high in China (Figure 1). Fig1 showed the regional distribution of the imitation goods damage in the world (Japan Patent office, 2014). As can be seen clearly from this graph, 68% of them have occurred in China. According to the Japan External Trade Organization (Akihisa Kamegaya, 2014), civil litigation relating to intellectual property rights in China has also continued to increase. In 2012 about 8.7 million cases went to trial. Among them, litigation related to patent rights was 9,680 cases (in which patent, utility model patent, and design patents are not disclosed), it has become the world’s largest country of intellectual property litigation.


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According to the Tokyo Metropolitan Intellectual Property Center (2014), at that time in 2013, in these two or three years, under the Chinese government focusing on protection of intellectual property rights and strengthen the crackdown on counterfeit imitation goods, each government department’s ability to respond to them has greatly improved, therefore litigation has been rapidly increasing. Japan’s External Trade Organization Shanghai Office (2012) describes methods for preventing the imitation diffusion route in China. Tsai, Lee & Chen Co Ltd. (2011) proposed the necessity of patent applications and attention points in the case of R&D outsourcing in China. Yang Gangmi (2013) stated, at that time, from the fact that the founding of the intellectual property specialized courts have become the trend of the world, in order to promote the revision and reform of the judicial system on intellectual property rights, China should establish a specialized court with China features, which should have the jurisdiction rights over civil, administrative and criminal cases for intellectual property rights.

Figure1: The Regional Imitation Goods Damage in the World Masashi Kurose (2007) reported the Chinese government has set a goal of “construction of innovative nation”, aiming to stage strengthening of scientific and technological power, and are trying to implement the new intellectual property policy. Naoki YAMAGUCHI (2006) mentioned that regarding the intellectual property, most important thing was to consolidate the competitive environment development in the market. For more information about the impact of the mental aspects of the Chinese

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people, Kouji Takahashi (2012) mentioned that Chinese traditional religion and to be the socialist state is causing the intellectual property issue. In addition, Wei Qixue (2012) reported the legal system of China's intellectual property rights used to be delayed compared to the developed countries, but with the rapid development of the market economy, their legal system has gradually developed and it now has established a legal system that meets the international advanced level. Still due to the not well-equipped to complete market system in China, the awareness of intellectual property rights protection of the general public is not enough. Therefore FDI foreign companies often received the infringement of trademarks and patents, especially along with the entry of foreign companies into the China market, intellectual property rights disputes have also steadily increased. However, the research or report, which perceives the problem of China's intellectual property rights as the issue of the awareness of Chinese citizens, is few. Discussing the problem of infringement of intellectual property rights in China only by research on legal aspects and policy measures is considered to be insufficient and limited in consideration of actual problems and countermeasures. In this research, counterfeit problems in China is investigated by the recognition of actual Chinese citizens rather than discuss legal aspects or conflicting cases of intellectual property rights in China as in the past researches. Under the assumptions described in the Section1 of Introduction, the survey was conducted and the results are able to clarify the level of awareness of Chinese citizens. In addition, this research is able to provide concrete proposals to reduce management risk on intellectual property rights of FDIJ companies doing business in China. In particular, this research can provide much knowledge about the risks of imitation, such as product type, price range, or regional tendency. The research results can be applied not only to Japanese FDI companies but also to other FDI companies in other countries. Moreover, it provides good insight on Chinese regulation or control method.

3. Methodology of this Research To achieve the research objects, this research report advances research with a deductive method based on the interview survey data and the analysis of them.

3.1 Conducted Survey From January 12 to January 30 of 2016 in Shanghai and in Wuhan, regarding intellectual property rights, the interviews were conducted on the street with 203 people.

1. Research Segmentation Table 1 showed the segment of survey of 203 people. Research segments are classified into gender, age, occupation, status, income, and region. Total of 203 people were interviewed. The allocation extraction (quota sampling) method was applied to conduct the interview so that each sample number of segments was as even as possible. However, it was not possible to carry out the survey evenly. The


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Survey sample was selected by the age segment into the main axis. For sample number 203, the sampling error is 3.1% with the reliance ratio being 95%.

2. Questionnaire Content Table2 shows the questionnaire content for 203 Chinese citizens on the street. Question (1) (2) (3) (7) are the single choice questions, Question (4) (5) (9) are the Multiple Answer questions, and Question (8) is an order selection question.

3.2 Analysis Method

The data collected by interview was analysed by the Chi-Square Test (p-values) and the adjusted residuals for confirm the significance of the results. Also qualitative analysis was practiced by the graphs and trend.

Table1: Intellectual Property Right Survey Segments in China

Gender Number Ratio(%) Occupation Number Ratio(%)Monthly

Income(RMB)Number Ratio(%)

Male 124 61.1 Student 10 4.9 Umemployee 23 11.3

Female 79 38.9 State-owned enterprise 19 9.4 0-3,000 32 15.8

Total 203 100.0 Private enterprises 69 34.0 3,000-4,999 40 19.7

Foreign businesses 15 7.4 5,000-9,999 75 36.9

Others 90 44.3 10,000-19,999 27 13.3

Total 203 100.0 More than 20,000 6 3.0

Total 203 100.0

Age Number Ratio(%) Position Number Ratio(%) Area Number Ratio(%)

20s 40 19.7 Employee 67 33.0 Shanghai 89 43.8

30s 40 19.7 Manager 35 17.2 Shanghai Suburb 13 6.4

40s 43 21.2 Owner 13 6.4 Wuhan 92 45.3

50s 40 19.7 Others 88 43.3 Wuhan Suburb 9 4.4

60s 40 19.7 Total 203 100.0 Total 203 100.0

Total 203 100.0


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Table 2: Nine Questionnaires about Intellectual Property Right

4. Survey Results of the Intellectual Property Right Perception in

China The analysis of the survey results were carried out in two ways: the χ-square test and the qualitative by graphs.

4.1 Analysis of Data

1. Chi-Square Test The survey results were analysed by the χ-square test, which used the program of the Excel χ-square test function “CHITEST”. The p-values of each segment by the questionnaire are shown in Table 3. In Table 3, for the six segment variables, p-values for Questions 1 to 9 were calculated and tabulated. In the χ-square test, if the p-value is less than 0.05, the data can be determined that there is significance. The portion in Table3 corresponds to it. Moreover, with the same data of Table4 the adjusted residuals are calculated whether the adjusted residual is +1.96 or more, or, -1.96 or less. If the adjusted residual is + 1.96 or more, or, -1.96 or less, it can be a reason for the significant difference of the data.

（１）

① Yes ② Have heard ③ Never heard

（２）

① Yes ② Have heard ③ Do not know

（３）

① No ② Sometimes ③ Often

（４）

① Less 50 RMB ② 51-300RMB ③ 301-600RMB

④ 601-1,000RMB ⑤ 1,001-3,000RMB ⑥ 3，001-10，000RMB

⑦ More than 10，001RMB

（５）

① Stationery, office supplies ② Kitchen ·dining ·toiletries goods ③ Shoes and other personal belongings

④ Cosmetics ⑤ Detergent ⑥ Clothing

⑦ Pharmaceuticals ⑧ Food ⑨ Software program

⑩ Video ·music ⑪ Bicycle, motorcycle, car ⑫ Others

（６）

① I think it's good. ② I think it's bad. ③ Neither

④ I have never thought about it.

（７）

① Because it is cheap ② Because it is sold ③ Others

（８）

① Price ② Quality ③ Convenience

④ Genuine article ⑤ Compliance with the law 　

（９）

① Custom ② Impact of society ③ Religious influence

④ Impact of mammonism ⑤ Living life rather tan law ⑥ Because everyone is doing it

⑦ Crackdown is not strict ⑧ Because it is sold ⑨ It's convenient.

⑩ From vanity ⑪ Can buy high price goods cheap ⑫ Others

Why do you think imitation / copy goods are not bad?

When you shop, please check how much important for following matter.

Do you think why imitation/copy products infest in China? (Multiple Answers)

Do you know the word of "Intellectual Property Right"?

Do you know it is illegal that purchasing or selling the imitation goods?

Do you purchase the imitation or copy goods well?

If you answer ②③in Question(3) , what kinds of price range do you purchase the imitation/copy

goods?（Multiple answer)

If you answer ②③ in Queston(3), what kinds of imitation goods do you purchase? (Multiple answer )

Do you think that it is good or bad that imitation copy goods are sold?


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As an example, the answers by gender to the questionnaire (1) “Do you know the word of intellectual property rights?” are shown in Table 4. Variable 1 is “Yes”, variable 2 is “have heard”, variable 3 is “never heard”.

Table 3: The p-Value of Chi-Square Test (It determined the significance

if the p-Value is less than 0.05 as )

Table 4: Example of the Adjusted Residuals regarding Intellectual Property

Right (Example of Gender Segment)

In this example, because p-value is 0.0069268 which is less than 0.05, it is determined that data is valid to say significant difference, and also the adjusted residuals are outside of ± 1.96 ( portion) in Table4, we can say the followings. About intellectual property rights for Male and Female, there is a tendency “Males know about intellectual property rights”, and “Females have heard about intellectual property rights”. In other words, it can be said that females are less aware of intellectual property rights than males.

2. Qualitative Analysis by the Trend All the questionnaire results were summarized in the graph to analyze them from the trend of the graph. Graphs are omitted in this paper due to the limitation of space.

P Value 0.006927

Male Female Total

Variable 1 80 35 115

Variable 2 33 38 71

Variable 3 11 6 17

Total 124 79 203

Expected Value Variable1 70.2463 44.7537



Adjusted residual Variable 1 2.3372 -1.4890

Adjusted residual Variable 2 -3.1622 2.0147

Adjusted residual Variable 3 0.3838 -0.2445

Q Segment Income Age OccupationPosition Area Gender

1 Intellectual Right 0.0088 0.0035 0.1843 0.2190 0.2693 0.0069

2 Illegality 0.1408 0.0966 0.7585 0.5061 0.0102 0.2793

3 Experience purchasing imitation goods 0.9155 0.0444 0.4341 0.0096 0.3128 0.1475

4 Purchase price of imitation goods 0.0679 0.7921 0.1656 0.1609 0.9900 0.0469

5 Type of imitation goods to purchase 0.6338 0.1366 0.4787 0.5590 0.0827 0.8070

6 Good and bad to purchase of imitation goods 0.6485 0.6318 0.6078 0.7412 0.0073 0.1642

7 Reason for purchase of imitation goods 0.0513 0.1069 0.4235 0.0312 0.3517 0.6113

8 Points of product purchase 0.9946 0.9948 0.0000 0.8029 0.9727 0.7804

9 Reason for infestation of imitation goods in China 0.7789 0.0000 0.1969 0.1659 0.9399 0.2461


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27.3

43.3

14.4

9.3 2.6

2.60.5

<50 rmb

51-300 rmb

301-600 rmb

601-1,000 rmb

1,001-3,000 rmb

56.735.0

8.4

Yes

Have heard

Never heard

38.4

36.0

25.6Yes

Haveheard

Do notknow

62.6

31.0

6.4

No

Sometimes

Often

4.2 Summary of Analysis Results From Fig.2 through Fig.9, they show the answer to the each question with 203 people without segmentation. Please refer Table2 for each question contents. For example, the result of the answer to question1 (“Do you know the word of intellectual property rights?” is 56.7% of interviewee answer “Yes”, 35.0% is “Have heard”, and 8.4% is “Never heard”. From these results, in general terms, it can be said that the majority of Chinese citizens know the term “intellectual property rights”, and the illegality of selling or buying them. Even when they feel selling imitation products is a bad thing, they

sometimes purchase them when the price range is 51～300RMB and the goods do

not adversely affect their health , because imitation goods are cheap and there is lax enforcement on the sale of these goods.

Talking about segmentation, in Table 5, Chai (χ)-square test results and qualitative analysis results are shown. In the column of “χ-square”, when the items “adjusted residuals” are out of ± 1.95, the comments are filled. As Mentioned in Section 4-2, if the items "adjusted residuals" are out of ± 1.95, that item can be a reason to say that there is a significant difference in data.

Figure 2: Result of Q-1 Figure3: Result of Q-2

Figure 3: Result of Q-3 Figure 4: Result of Q-4


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56.7

7.9

4.4

31.0

Because itis cheap

Because itis sold

Others

Noanswer

16.5

55.1

7.0

10.7

10.7

Price

Quality

Convenience

GenuinegoodsCompliancewith law

4.4

61.1

26.6

7.9

I think it's good

I think it's bad

Neither

I have never thoght about it

11.64.5

22.3

0.7

4.1

22.30.3

2.4

12.7

13.4

2.4 3.4

Stationery,office supplies

Kitchen · diningtable · toiletries

Shoes andother personal

belongingsCosmetics

Detergent

Clothing

Pharmaceuticals

Figure 5: Results of Q-5 Figure 6: Result of Q-6

Figure 7: Result of Q-7 Figure 8: result of Q-8


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Figure 9: Result of Q-9 Table 5 shows the recognition tendency of Chinese citizens to counterfeit by the qualitative analysis (the trend of graphs) and Chi-Square Test/Adjusted Residuals. In the result comments of the table, (T) means the results from the qualitative analysis, and (P) means the results from the Chi-Square Test/Adjusted Residuals. In recognition of intellectual property rights, gender plays a role as males appear more aware than females. In addition, recognizing the illegality of buying and selling counterfeit products has regional differences in that those from Shanghai were less able to recognize counterfeit goods than those from Wuhan. The tendency to purchase imitation goods showed a marked difference between age and position, and also unemployed people tended to purchase more. Regardless of gender, there is an accepted price difference between counterfeit and genuine products. . Also, in terms of how they felt about counterfeit goods, citizens of Shanghai are less aware of the sale of imitation goods. Regarding the reason why imitation goods are bought and sold in China, the answers varied depending on age. Those in their 30’s tend to purchase because everyone is doing so.

0 20 40 60 80 100 120 140 160

Custom

Impact of society

Regious influence

Impact of mammonism

Living life rather than law

Because everyone is doing it

Crackdown is not strict

Because it is sold

It7s convinient

From vanity

Can buy high price goods chiep

Others


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Table 5: Summary of Survey Analysis Results (T) means the results from the qualitative analysis, (P) means the results from the Chi-Square Test/Adjusted Residuals.

The followings are the summarized results of the Chai (χ)-square test/adjusted residuals, and also quantitative graphs.

1. Awareness about Intellectual Property Rights To the question about knowing the term “intellectual property rights”, 91.67% of those surveyed answered “Yes” or “I have heard”. Only 8.4% selected the “Never Heard” answer. A comparison between Wuhan as the inland area and Shanghai as the coastal area, people of Shanghai show a higher recognition of counterfeit products than those from Wuhan. If you look at the segments, men more so than women, those in their 30s, those with a higher income, state-owned enterprises employees rather than foreign companies were shown to have a high awareness of intellectual property rights.

Question p-Value X suare Segment Result

0.0088 Significant Income (T) More income, more awareness

0.0035 Significant Age (T) Awareness of 30s is relatively high

0.0069 Significant Gender (T) Awareness of men is higher than women

2 0.0102 Significant Area

(P) There are few Wuhan people who does not know

(T) People in Shanghai and Shanghai suburbs tend to have a low

perception of legal breach.

0.0444 Significant Age (T) The younger the age, the higher the tendency to purchase.

0.0096 Significant Position

(P) Other people do not seem to buy it

(T) Every position　people rather choose ①、next is ②．

(T) Manager position ③　is higher than other position people.

4 0.0469 Significant Gender(P) It is seems like Men buy the price range of 601～1,000 rmb, and

women do not buy that price range goods.

6 0.0073 Significant Area

(P) It seems that people in Shanghai tend to think that it is good, and

people in Wuhan tend to not think it is good.

(T) People of Shanghai and Wuhan in urban areas　tend to think it is

bad rather than suburb.

0.051301 Significant Income (T) Lesser income people more choose ①

0.0312 Significant Position(T) Employee/ manager less choose ② ③.

(T) Owner choose ①followed by ②.

8 0.0000 Significant Occupation N/A

9 0.0000 Significant Age

(P) In 30s, it seems to be caused by what everyone is purchasing

(T) All generation choose ⑦ for the reason followed by ⑨ ⑪.

(T) Major generation who choose ②　are 20s and 40s.purchasing.

3

7

1


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2. Recognition of the Illegality on Intellectual Property Rights Violation In addition, the recognition of illegality of buying and selling of imitation goods or intellectual property rights information does not coincide with the recognition of the term “intellectual property rights”. 25.6% of those interviewed did not recognize the violation of the law. In particular those from Shanghai had a lower recognition of the violation of the law. This study is a survey in-person interview, so there is a possibility that those surveyed did not answer correctly because they did not want to lose face if they answered “do not know”. We need to also consider the local culture.

3. Trend of Imitation Purchase 62.6% of those interviewed said they will not purchase the imitation goods. From the survey, Shanghai residents did not have hesitation, unlike the Wuhan residents, to buy them. In terms of trends for buying imitation goods, those in their 30s were the highest, and less so with older age groups. Between men and women, there is a tendency of women buy more. Income was not a factor in their purchase decision. . In addition, with regards to employment, people of the state-owned enterprises had a higher tendency to buy them.

4. Price Range and 5. Type of Imitation Goods to Purchase Regarding the purchase intention based on the price of the imitation goods, “less than 300 yuan” was the highest, and that number fell sharply when the price was higher. Stationery and office supplies (16.7%), shoes and other personal belongings (32.0%), clothing (32.0%), software programs (18.2%), video and music (19.2%) were relatively high, the kitchen/dining/toiletries goods (6.4%), cosmetics (1.0%), detergent (5.9%), pharmaceuticals (0.5%), food (3.4%), bicycle, motorcycle, motor vehicles (3.4%) were lower. In other words, imitation goods, which were less than 300 yuan and did not adversely affect their health, was well purchased, and the imitation goods, which were priced higher or had an effect on their health, had lower purchase intention percentages. These results show that Chinese consumers do not purchase all imitation goods, but rather purchased most imitation goods that did not impact their health.

6. The Good and Evil of Imitation Goods, and 7. Why Imitation Goods are

Available Regarding imitation goods sold in China, 61.2% overall of the citizens surveyed recognized the imitation goods as bad (or poor quality?), and only 4.4% of them considered it OK. For those that deemed the products as bad, more people in Shanghai rather than Wuhan, more men than women,, older rather than younger people, and , those that were employed by state-owned enterprises rather than other employers, had relatively higher recognition. In addition, among the people who answered that imitation goods were not bad, the largest reason chosen was “because cheap” referring to the cost of the goods Also among the people who selected the answer “because of being sold”, those in Shanghai more so than Wuhan, those in their 30’s to 50’sin age, those with higher incomes, students, and foreign company workers had higher percentages. .


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8. The Order of Importance when Purchasing Goods Across all segments of those surveyed, there is great emphasis in the order of quality, price, the real thing, convenience, and legality when purchasing goods. They do not consider legality as important.

9. The Reason for Why Imitation Copy Goods is Rampant in China When we asked why imitation goods are rampant in China, the answer of “because no strict crackdown” was the highest answer for all segments. Then “convenience”, “low price”, “life than law”, and “society” followed. Those trends are no different between Shanghai and Wuhan. By age, the tendency of those in their 30s is different than the other age groups. “Because no strict crackdown” was the same across all segments, then “convenience”, “because everyone is doing”, and “low price” followed. Many people also chose “impact from society” as a reason, especially those in their 20s and 40s. We will examine the above survey results and the assumptions we initially made.

Assumption 1: The reason for the infringement of intellectual property rights (counterfeit goods) in the Chinese market is weak perception of Chinese citizens' intellectual property rights. Judging from the results, approximately 92% of citizens recognized intellectual property rights, but 74.4% of citizens are also aware of their illegality. Therefore, it is considered that the issue of infringement of intellectual property rights in China is not exclusively a lack of awareness.

Assumption 2: Awareness is different in Chinese citizen demographics (gender, income, status, occupation, age, region). It is considered that the different awareness by demographic is clearly illustrated in the results. For example, women are less conscious of intellectual property rights than men, and the region of Shanghai is less conscious of intellectual property rights than Wuhan. Furthermore, urban citizens are more conscious of illegitimacy, and low income citizens are more purchase tendency.

Assumption 3: Chinese citizens have their own reason to buy counterfeit goods. The study determined Chinese citizens would not purchase counterfeit goods which come in contact to their skin or food and drink, because it will effect on their own health. Their counterfeit purchase behavior shows 51 to 300 RMB represents 43.3% of their purchases, and below 300 RMB accounts for 70.6% of their counterfeit purchases. In China, counterfeit goods are not highly regulated and are significantly more affordable. By evaluating quality, value, and circumstances around them, Chinese citizens naturally manage their counterfeit purchases.


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Past research was often conducted by the firms suffering the intellectual property rights damage. While research focused specifically on Chinese citizen purchase behavior like this research has been extremely rare. This research identifies that it is very important and valuable to consider countermeasures against the intellectual property right infringement problem in China.

5. The Influence Factors to the Mind in Chinese People Through this research, the average perception of Chinese citizens to the imitation goods is put together as “We know imitation is illegal, but the law enforcement and crackdown is not strict enough, and the price is cheap and convenient. Without any quality problems and no effect on human health, we are going to purchase.” The most important countermeasures in China to be considered are to severely crack down on the manufacturers and distributors of these illegal goods. In addition, it is important to educate the general public about the unlawfulness of counterfeit goods.

6. The Proposed Countermeasure to the Intellectual Right Problem

in China Now we consider the necessary countermeasures for FDI Company to expand into the China market. Some FDIJ associates said "If our products are counterfeited and available in China, it proves our brand became famous". They need to discard these optimistic notions and to prepare the countermeasures to eliminate future risk. 1. The product trademark registration and patent application in China 2. To adopt an approach on products that can confirm authenticity. Lot number must be included on all goods produced. There are telephone services that can confirm by lot number whether good are authentic. It is therefore necessary to include a phone number on items to also include a passcode in bar code of the product. 3. Integrate unique packaging to ensure it is nearly impossible to duplicate. By using anti-counterfeiting technology (utilization of anti-counterfeit labels), for example, a unique container surface developed through a special process or with special material, make it difficult to copy. They can also include an authenticity seal on products which cannot be imitated as an example. 4. Ensure the product packaging is destroyed after use. Also, a cap seal should be designed to be broken when it is opened to prevent re-use of container. 5. Regularly audit the market. For example, check the wholesale district or internet. 6. If the counterfeit goods appear on the market, there is a need to take the following action: Launch a consumer awareness campaign through media and enforce that the distributors not carry the counterfeit goods. Submit a cease and desist


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communication to the manufacturer or the seller. Also, you should submit a legal enforcement request to customs, police and other government administrative services and provide a provisional disposition application and preservation of evidence to the court. Submit a damage claim report to the relevant organizations or agencies- the State Economic and Trade Commission, the State Administration for Industry and Commerce, the National and local Copyright Administration, Mass Quality Supervision Inspection and Quarantine Bureau (AQSIQ), Economic and Trade Commission, Ministry of Public Security and Customs. It is also important to carry out prevention activities together with industry associations, such as China IPG (Intellectual property group in China). As an example, the Japanese agricultural chemicals industry has been successful implementing their own measures on the basis of cooperation of the Chinese authorities corresponding to the increased counterfeiting since the 1990s. 7. From the survey results, products that do not affect the health- for example, stationery and office supplies, shoes and other personal belongings, clothing, software programs, video and music and relatively inexpensively priced goods (less than 300 yuan) have a higher possibility to be counterfeited. FDI companies, who want to sell these goods in China, in particular, must be careful. Of course, product types have been counterfeited in China, such as automobiles, bicycles, sewing machines, agricultural chemicals, and also pharmaceutical products. All products should be considered a target. 8. If you look at the district, when comparing the of the coastal areas of Shanghai and the inland area of Wuhan, people of Shanghai area have lower awareness of the legality of intellectual property rights and have less guilt for counterfeit purchases. This seems to be affected by the fact of that the counterfeit market is more developed in the coastal areas than inland. Therefore, there is a need to put more effort in the coastal areas than inland.

7. Conclusions In the results of this survey, the imitation goods’ price range and product groups which Chinese people tend to purchase was revealed. In addition, by the segments of district, age, gender, occupation, and position, the differences of the perceptions of imitation or the consumption behavior were researched. As a result, for the sake of intellectual property rights protection in China, counterfeit goods crackdown is the most important, and also it was declared the importance of enlightenment for the intellectual property rights of citizens. Proposed countermeasures were then provided against counterfeit goods for FDI enterprises. In this research, there is originality in describing the risk of intellectual property rights and countermeasures from the viewpoint of recognition of counterfeit of Chinese citizens, which had not been studied well in the past. This research clarified risks by district price, or product etc., and is able to provide guidelines for developing risk management policy. In that sense, its contribution and importance to the economy is large.


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There were limitations on this survey; one is the number of samples. The sample was selected to investigate many segments and represent the population as much as possible, but the survey sample was as small as 203 and the area were limited to Shanghai and Wuhan. Due to this, further research may be required to provide a good sample size. It would be good for this research to support the development of Chinese intellectual property rights protection, and to promote further investments of FDIJ companies in China.

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