Articles
2012.06.26 12:12

Fakes and status in China

(*.104.48.44) 조회 수 33728 추천 수 0 댓글 0
?

단축키

Prev이전 문서

Next다음 문서

크게 작게 위로 아래로 댓글로 가기 인쇄
?

단축키

Prev이전 문서

Next다음 문서

크게 작게 위로 아래로 댓글로 가기 인쇄

Fakes and status in China

China is known formalinvestment”. Its consumption habits are also pretty dodgy

Jun 23rd 2012 | from the print edition

@dodgy = dishonest, unreliable

MOST shop windows proudly showcase what can be bought inside. The window of the Silk Street Market, a touristy shopping centre in Beijing, is a bit different. It displays a pair of official notices advertising what cannot be bought inside. These non-offerings include luxury brands such as Prada, Louis Vuitton and Burberry. The notices are meant to save customers from buying fakes unwittingly. But many still buy them wittingly. You could almost say that counterfeits remain Silk Street’s trademark, despite the market’s efforts to stamp them out. On the ground floor, a purple “Paul Smith” polo-shirt from a Guangzhou factory was offered to your correspondent for 1,285 yuan ($200), a price which eventually fell to 150 yuan. It is not easy to walk away from such bargains. Especially when the stall holder will not let go of your coat.

@ unwittingly: do something without realizing it
@ stamp something out: destroy or get rid of something bad
@walk away: leave a difficult situation
@stall: (v) stop, try to avoid, prevent; (n) table with goods to sell, seats in theatre, small room for particular purpose.

Economists and policymakers around the world want China to consume more. They are eager for it to reduce its dependence on investment, which amounted to almost half of GDP last year. No economy that invests so heavily can possibly invest it all wisely. Economists therefore worry about a widespread misallocation of capital, or “malinvestment”. But some of China’s consumption is also a bit questionable.

Fake goods are rife. Researchers once stopped every fifth person in a Shanghai mall and asked them about their buying habits. Of the 202 who completed the survey, almost three-quarters admitted to buying
knock-off luxury goods. The resulting paper* by Ian Phau and Min Teah of Curtin University of Technology in Australia was titled “Devil wears (counterfeit) Prada”. Some people buy luxury brands as an act of self-expression. Others buy them as an act of social emulation. They want to wear the same brands as the people they aspire to be. The Chinese are more likely to be this second type of buyer, according to Lingjing Zhan of Hong Kong Polytechnic University and Yanqun He of Fudan University. And, other studies suggest, such status-seeking consumers are more likely to buy counterfeits.

@knock-off: a cheap copy of a wall-known product
@emulation: an ambition and effort to equal, excel or surpass another
@aspire to something: have a strong desire to gain or achieve something
@status-seeking: a drive to acquire power

A Prada handbag is a bundle of two things: a well-made product and a well-marketed brand. But some consumers value prestige, not quality. Fakes allow shoppers to “consume” the prestigious brand without buying the high-quality good, as Gene Grossman of Princeton and Carl Shapiro, now of the University of California, Berkeley, pointed out in a seminal 1988 paper. This unbundling no doubt drives Prada and others mad, but it would seem to be a boon to consumers.

@unbundling: separate pricing of goods and services; takeover of a large conglomerate with a view to retaining the core business and selling off some of the subsidiaries to help finance the takeover
@no doubt: certainly, probably


Or is it? As Messrs Grossman and Shapiro also point out, a luxury brand confers status only because it is exclusive. It has to be “widely popular but not widely accessible”, as one marketing professor puts it. People who buy Prada are paying for exclusivity. The devils who wear counterfeit Prada erode that exclusivity, imposing an “
externality” on owners of the genuine article.

As counterfeiters
rush to replicate a brand, the brand owners fight to distinguish themselves from the fakes. In a recent paper, Yi Qian of Kellogg School of Management studies the response of branded Chinese shoemakers to an influx of fakes after the government shifted its enforcement efforts to more urgent things, such as stamping out counterfeit food, drugs and alcohol. Many shoemakers reacted by improving the quality of their footwear, importing Italian pattern-pressing machines and using pricier materials, such as crocodile skin. Their response contradicts the popular notion that fakes inhibit innovation and investment. But firms also raised prices by more than was warranted by their extra costs. Buyers of fakes therefore impose a cost on people who want to buy the real thing. They make brands less exclusive—or more expensive.

But it is possible that buying genuine luxuries imposes an externality of its own. Status, after all, is a “positional” good. To be top of the social
heap, it is not enough to have fine things. Your things need to be finer than everyone else’s. Someone who buys a more expensive watch or car to climb up the social ladder forces other social climbers to spend more to stay ahead. In making their purchase, they will carefully weigh how much prestige their big spending will buy. But they will not take into account how much extra everyone else will now have to spend to preserve their social position. As a result of these “arms races”, China may be overspending on luxury goods. Its shoppers account for only 6% of the world’s consumer spending, but, according to figures released by Bain Consulting last month, they now account for 20% of global sales of luxury goods.

@heap: a pile of things


Sympathy for the devil

These wasteful status games are not confined to China’s finely dressed elites. In China’s villages, people cement their position in the local
pecking order by hosting expensive weddings, funerals and other ceremonies for their own family and buying costly gifts for other people’s. Xi Chen and Ravi Kanbur of Cornell University, and Xiaobo Zhang of the International Food Policy Research Institute, have studied the “gift-books” kept by households in 18 poor villages in the mountains of Guizhou, a southern province. They found that the poorest households (those living on less than $1 a day at purchasing-power parity) spent about 30% of their budgets on gifts and festivals, twice as much as similarly impoverished Indians. When a household enjoyed a sudden windfall—such as compensation for requisitioned land—they would spend more, forcing everyone else to keep pace. Economists fret that Chinese investment is marred by wasteful prestige projects, orchestrated by local bigwigs seeking to outdo one another. Perhaps its consumption is not that different.

@peck: move its beak forward quickly and bites at it.
@purchasing-power parity: how much money would be needed to purchase the same goods and services in two countries
@impoverish: make them poor
@fret: worry about it
@bigwig: important person but rather disrespectful
@outdo: be more successful than they are at particular activity

TAG •
?

  1. No Image

    Ending lawmakers perks

    Ending lawmakers’ perks @perk: special benefit Self-reform plans must not be just lip service Political parties are nothing if they don’t compete with one another in almost everything. Yet voters are rather bewildered with the ongoing competition amo...
    Date2012.06.26 CategoryArticles Views18263
    Read More
  2. No Image

    Diabetes Linked to Memory Problems in Older Adults

    Diabetes Linked to Memory Problems in Older Adults By ANAHAD O'CONNOR JUNE 19, 2012, 12:16 PM50 Comments A new study adds to growing evidence that the complications of diabetes may extend to the brain, causing declines in memory, attention and other c...
    Date2012.06.26 CategoryArticles Views21091
    Read More
  3. No Image

    June 4, 2012 - Syrian President Speaks about Violence; Mubarak Sentenced to Life in Prison

    Syrian President Speaks about Violence; Mubarak Sentenced to Life in Prison Aired June 4, 2012 - 04:00:00 ET GROUP: This is Mr. Bechsel`s (ph) study hall (inaudible) class (inaudible). Welcome to CNN Student News. UNIDENTIFIED MALE: Off to you, Carl. ...
    Date2012.06.26 CategoryCNN Students News Views29382
    Read More
  4. No Image

    The coming conflict

    The coming conflict China and the United States seem to be heading toward a course of conflict. These two mega-powers of the world have now become global rivals. Their relations are tense; their interests are in conflict; and they face tougher times a...
    Date2012.06.26 CategoryArticles Views19282
    Read More
  5. No Image

    Fakes and status in China

    Fakes and status in China China is known for “malinvestment”. Its consumption habits are also pretty dodgy Jun 23rd 2012 | from the print edition @dodgy = dishonest, unreliable MOST shop windows proudly showcase what can be bought inside. The window o...
    Date2012.06.26 CategoryArticles Views33728
    Read More
  6. No Image

    The High Price of Loneliness

    The High Price of Loneliness (By JUDITH GRAHAM) Loneliness stings at any age. But in older people, it can have serious health consequences, raising the risks of an earlier-than-expected death and the loss of physical functioning, according to a study ...
    Date2012.06.21 CategoryArticles Views8702
    Read More
  7. No Image

    NCsoft braces for massive restructuring

    NCsoft braces for massive restructuring Computer games giant NCsoft is undergoing a major operations overhaul, shaving costs and terminating a slew of money-losing projects. => NCsoft is dieting. @brace: a device attached to a part of a person’s body ...
    Date2012.06.21 CategoryArticles Views9143
    Read More
  8. No Image

    June 8, 2012 - FBI Investigating Leak of Classified Document

    FBI Investigating Leak of Classified Document Aired June 8, 2012 - 04:00:00 ET UNIDENTIFIED FEMALE: This is Union Point (ph) School in Harmonelle (ph), Illinois, and you`re watching CNN Student News. CARL AZUZ, HOST, CNN STUDENT NEWS: Here it is, our ...
    Date2012.06.21 CategoryCNN Students News Views42159
    Read More
  9. No Image

    September 7, 2011

    Note-Taking 1. Texas wildfire - 180 fires, 700 homes dest., wind shift -> more dangerous 2. Talas impact 3. 4. Postal Services'll be changed. 5. Today Expressions let it get her down There's no self-pity. be better off than most you can't really thin...
    Date2011.09.08 CategoryCNN Students News Views11950
    Read More
  10. No Image

    What does ET and PT mean?

    Eastern time and Pacific time. basically broadcast stations broadcast the same thing in the US and for example it may be 4 pm in Florida and 3pm in Illinois and people need to know when the show stars in their area. Time Zones in the USA, ET stands f...
    Date2011.08.12 CategoryEnglish Views22133
    Read More
  11. No Image

    Summer Edition - July 27, 2011

    It's been one of the biggest stories of July. Whether you've saw news on the 1st order or the 21st of this month, chances are you've heard something about America's debt ceiling. This special summer webcast is just gonna sum it up for you and explain...
    Date2011.08.10 CategoryCNN Students News Views12306
    Read More
  12. No Image

    영어공부에 활용하기 좋은 Podcast!

    야로로님의 블로그에서 발췌한 자료입니다. Bold 처리 된 부분은 제가 구독하는 Podcast 입니다. ================================================ 1. English as a Second Language Podcast http://feeds2.feedburner.com/EnglishAsASecondLanguagePodcast 2. NPR_Sci...
    Date2011.08.10 CategoryEnglish Views15976
    Read More
Board Pagination Prev 1 2 3 4 5 6 7 Next
/ 7