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The economy of the People's Republic of China (PRC) continues to grow at a high rate (still around 11%GDP). The numbers of new millionaires and many more with high disposable incomes in the PRC are burgeoning, as evidenced by growing numbers of Chinese tourists overseas, car ownership, the property market and the Chinese stock market. There is an unquenchable thirst for consumer products. A similar picture is emerging in other Asian economies. However, there is a dark side to this economic miracle product counterfeiting, theft of intellectual property (IP), unsafe products and, in some instances, accusations of slave labour and child abuse in local factories. For Western companies buying or sourcing in Asia, the risks to their corporate reputation and brand should not be under-estimated. Recent high profile examples include unsafe toys, toxic substances in toothpaste and contaminated foodstuffs as well as counterfeit car parts, computers, DVDs and clothing. Counterfeiting of credit cards from Western banks is on a huge scale. Equally, Western luxury brands now want to sell into China and Asia generally to tap the new consumer wave there. Such global brands and their reputations are at high risk from unscrupulous criminal gangs and lax regulatory enforcement in Asia.

This paper examines the risk issues relating to intellectual property, product safety, reputation and brand affecting the two-way trade with Asia. Case examples, including those worked on by members of the Asia Risk team, are used to illustrate the phenomenon. Current approaches to deterrence, prevention and mitigation are discussed.
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Keywords: brand; counterfeiting; intellectual property; product safety; reputation; risk

Document Type: Research Article

Publication date: January 1, 2008

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  • The International Journal of Management Cases (IJMC) developed in 2002 from its predecessor The Journal of Management Cases, and present case studies across a broad range of management disciplines. The IJMC is the official journal of the CIRCLE Research Centre. CIRCLE (Centre for International Research Consumers, Locations and their Environments) is a virtual research group spreading over 70 universities.
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