Monday, November 12, 2007

A Counterfeit Backhoe -- Chinese Fakes are BIG

[More from J.P. Fielder, senior communications director, from NAM President John Engler's trade mission to Japan and China. In China, Engler is heading a delegation that represents the President's Advisory Committee for Trade Policy and Negotiations, or ACTPN.]

Two very interesting points from the ACTPN delegation's meeting with James Fallows, senior editor for The Atlantic Monthly and arguably the most knowledgeable journalist about the interrelation of U.S. and Chinese manufacturing. (His July cover story was, "China Makes, the World Takes.")

First, Japan still dwarfs China in overall GDP and that we cannot lose focus on this important ally and manufacturing partner. This is something we discovered last week as the Japanese, from business leaders to government officials, were highly appreciative of Gov. Engler's visit.

Second, protecting intellectual property should be a priority for U.S. policy toward China, and there's plenty of work to be done. As a casual observer, I was struck by the prevalance of counterfeit products in China. Sure, everyone expects the swarms of vendors selling knock-off Rolexes, Coach purses and "Beijing 08" knit hats, but I became painfully aware of the issue while driving to the Great Wall during our one day of touring, on Sunday.

As we passed a roadside construction site, Al Bernard, an ACTPN delegate and senior vice president of Manitowoc, manufacturer of heavy cranes, pointed to one of the backhoes working at the site. "That's a counterfeit backhoe," he suddenly said. "WHAT!? How can you tell?" I asked. This side of counterfeiting is very new to me, as I thought it was an industry making cheap junk (think T-shirts, purses and poorly constructed watches) in a garage. Wrong! This is about real American products being ripped off and built in foreign factories. In this case, it was a Caterpillar backhoe, not exactly something you slap together in the back garage but something that requires a legitimate assembly line and manufacutring facility.

Caterpillar is a strong all-American company based in Peoria, Illinois. Chinese free-riding on the ingenuity of hard-working Americans, not to mention the millions in R&D, is just not right. The rampant counterfeiting needs to be addressed by the Chinese government and with consultation from the international community, if necessary.

Tagged: Caterpillar , Chinese counterfeits , Manitowoc

Posted by JP Fielder at November 5, 2007 4:58 PM