Behind the curtains of this trillion-dollar industry: counterfeit luxury goods
By: Grace Shao
Tags: Trade, Global Trade, Luxury Goods, China, Counterfeit

THE SILK MARKET

When China’s First Lady Peng Liyuan wants to take visiting diplomats shopping, she often heads to Beijing’s famous Silk Market, located on busy Chang-an Street, which translates to Eternal Peace Street. The Silk Market has a prime location, close to the People’s Bank of China, the ultimate symbol of authority, and not far from Tiananmen Square, the gateway to China.

The Silk Market is the size of an average shopping mall in any mid-size American city and is home to more than 1,700 retailers, mostly selling memorabilia, cashmere sweaters, tailored suits, and an array of silk scarfs and porcelain vases that appeal to visiting foreigners.

But the Silk Market’s fame goes beyond its broad selection of goods at bargain prices. It is also one of Beijing’s biggest markets for counterfeit luxury goods. It is where Chinese and foreigners alike go to buy fake Rolex watches, Louis Vuitton handbags, Chanel perfume, Ray-Ban eyeglasses, North Face jackets and any number of items with Gucci logos.

“You want to buy? How much you give?” sellers shouted outside their shops in this high-rise mall. Small shops behind glass walls are crammed into tiny spaces, row upon row. Each store looks rather similar to the next.

On the “Leather Goods” floor, small stores are split in half by hanging bed sheets. The front is jammed with products with no designer labels. In the back, behind the hanging sheet is the good stuff — fake Gucci, Chanel and Louis Vuitton. If you pick up a purse, you’re immediately cornered by a vendor asking you to give an offer of what you would pay. If you put down the purse and walk away you might be ushered to the side, offered half or even a third of the initial price. Or there might be a slew of profanities muttered under the breath of a discouraged, but aggressive sellers.

“We get them (the purses) here through hiding it within other products,” said Xiao Diao, a seller who preferred to be called “little Diao,’’ with Diao being her family name. Xiao Diao stands at the end point of a supply chain that is murky, even to those vendors selling counterfeit luxury goods. This vendor said she had no idea where the goods she was selling came from. Only her boss did.

“Honestly no one can find the source of the factories because they go through three or four hands, then it gets to me,” said Ms. Diao. She said she imagined that the goods came from Hong Kong — something that sellers added to each sentence to create the illusion that they are offering premium goods to buyers. And that may, or may not, be true as a porous border between Hong Kong and Mainland China allows for goods to be manufactured in China, sent to Hong Kong and then transshipped back through Hong Kong ports as “legitimate” cargo.

“Everything is made in Hong Kong,” she continued. “It’s too strict in Mainland these days, and most factories only work during the night and not during the day.” In reality, many of the goods sold at the Silk Market are made in Guangdong province, a manufacturing hub just over the border from Hong Kong, making it convenient for goods to move back and forth.

The market for counterfeit luxury goods operates out of the limelight and under the table. And, it is global, growing and big. Last year alone, an estimated $460 billion worth of counterfeit goods were bought and sold globally according to the International AntiCounterfeiting Coalition, a Washington, DC organization that combats fake goods and product piracy.

The global trade in fakery is nearly ten times the revenue of LVHM, the company that owns luxury brands such as Celine, Dior, Givenchy, and Louis Vuitton, and is one of the biggest makers of high-end goods. LVHM reported revenues of almost 47 billion euros or approximately $53 billion in 2018. The company has also spent millions of dollars filing lawsuits around the world to battle counterfeit versions of its luxury — and very expensive — products.

The International AntiCounterfeiting Coalition estimates that the market for counterfeit goods of all sorts has grown by 10,000 percent over the last two decades, calling it a $1 trillion market overall. This number represents fake goods of all kinds — from pharmaceuticals to computers as well as luxury goods. Meanwhile, the OECD values the market at an annual $461 billion and says it accounts for 2.5 percent of global trade. On top of that, because the fake luxury goods market is an all-cash business, state and local governments are deprived of sales tax revenues.

This market for fakes comes at a time when China is working to reinvent itself as a technological powerhouse and shake its reputation as the manufacturing hub of the world. Luxury Western brands have provided incredible profits thanks to China’s massive working class, eager to trade life on farms for work in urban factories in the 1990s and early 2000s. These workers provided the manpower for the factories turning out fake goods. Even more, the rising incomes in China have created new-found wealth for these workers to buy more goods — real or not.

China has been the world’s factory for products of all kinds since the economic reforms of the 1980s that helped transform the country. According to the Economist, China produced three percent of the world’s global goods in the 1990s. Now, the country produces nearly a quarter of all products sold around the world. And that manufacturing prowess also extends to making fake products alongside legitimate ones.

“Not only are the legitimate companies coming to China to manufacture their goods, but also the illegitimate traders,’’ said Jack Chang, Chairman of Quality Brands Protection Committee, a China-based industry organization made up of 200 foreign companies operating in China.

Fake goods made in China seem to be as common, and popular, in China as they are in the United States, as well as in little shops on streets all around the world.

“The overwhelming majority of counterfeits that are seized coming into the US are imported directly from Mainland China,” said Travis Johnson, vice president of legislative affairs and senior counsel at the International AntiCounterfeiting Coalition. He said that when law enforcement officials seize counterfeit goods coming into the United States from Hong Kong, the goods were mostly, in fact, made in Mainland China and only transported through Hong Kong, to make them look like legitimate goods.

Because counterfeit luxury goods business operates in strict secrecy, it is hard for regulators and law enforcement agents to crack down on the practice. Fake invoices, legitimate shippers and cargo containers filled with fake goods are all part of a chain that starts with the manufacturer in China and ends up on the streets of New York’s Chinatown and in other cities around the world.

Several factors, besides low price, is fueling the counterfeit luxury goods market. It is a business with a low cost of manufacturing and high profits. There is also the allure owning something with a logo from a big international brand — even if it is not real — that appeals to consumers everywhere. A globalized world makes cross-border trade easy so that goods can get shipped from one country to the next. And, importantly, there has been weak international enforcement, with little coordination between regulators in any number of countries.

In many countries, the sale of counterfeit luxury goods is seen as a “victimless” crime and given a low priority.

In New York, for instance, many customers know that they are clearly buying fake merchandise. Yet doesn’t seem to deter a large number of buyers coming into the city’s famous Chinatown, which sits at number 15 on Google’s “What to do in New York” list. Though the travel tip is intended to showcase Chinatown’s history, culture, and food, counterfeit goods are fast becoming an attraction of their own. Guides as such, “Good quality Knockoffs!” or “where to find the best knockoffs in Chinatown? “can be found on TripAdvisor and local guides help steer tourists to eager fake goods sellers.

On Chinatown’s narrow streets, vendors carry black garbage bags under their arms and shout out names of luxury goods. Small groups of tourists gather around them, looking into the garbage bags with fascination. For $30, you can buy a Gucci Small GG Supreme Messenger Bag. The original would cost you $850.

“Gucci, Gucci, Louis Vuitton?” A middle-aged woman wearing a huge black parka said under her breath in the corner of Mott Street and Canal Street. She lifted the right side of her coat and revealed a small cross-over fake bag.

“How much?” asked a middle-aged man, bundled up in his winter coat and wearing a beanie.

The man handed over two twenties, and the bag was off her left shoulder and under his arm in a black plastic bag.

Mr. Chan, a Chinatown native, said the area has seen a significant change in the last thirty years, for better and worse. Rent has gone up; art galleries and hipster coffee shops have slowly lined up on the streets. Meanwhile, the counterfeit good vendors have become more brazen, coming out of hiding and selling their goods in broad daylight.

Clamping down on these sales has proved to be difficult. Mr. Chan said that law enforcement agencies are often more concerned about going after serious crimes, murders, arson and the like, which have clear victims rather than chasing after sellers of fake purses. Moreover, counterfeit goods appear to harm no one but the manufacturers of luxury goods and brands.

“I mean (hawkers will) get a fine, and maybe a few days in jail but the NYPD doesn’t want to clog the courtrooms with these cases,” said Mr. Chan. “They don’t care anymore, but when the counterfeit task force puts pressure on them, they (NYPD) will just round up the usual suspects you know like in Casablanca.”

Still, law enforcement officials are making some headway and have been bringing charges against some large fake luxury goods rings.

Just last August, the federal government seized $450 million in counterfeit luxury goods, following a six-year investigation. As part of that seizure, it also arrested 33 individuals on charges of conspiracy, trafficking in counterfeit goods and trademark counterfeiting.

The goods came into the United States through the ports of New York, New Jersey, and Los Angeles and included knock-offs of items from Gucci, Tory Burch, Hermes, Coach, Burberry and many others often sold in the exclusive shops that line Madison Avenue.

In a press conference announcing the arrests, Angel M. Melendez, Homeland Security Investigations Special Agent in charge, said, this investigation should be a crystal-clear message that counterfeiting and intellectual property rights violations are anything but a victimless crime as it harms legitimate businesses, consumers and governments.”

Anti-counterfeit experts say Canal Street in Chinatown along with Santee Alley in Los Angeles is among the largest counterfeit markets in the world.

Another government official, Assistant Attorney General Brian A. Benczkowski said, “The illegal smuggling of counterfeit goods poses a real threat to honest businesses,” and added that: “The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”

While shoppers may like to get a bargain, manufacturers of the luxury goods being duplicated have been trying to clamp down on the business for years — with mixed results. The International AntiCounterfeiting Coalition which represents household brands such as Kate Spade, Louis Vuitton Malletier, Burberry and Calvin Klein, says that counterfeit goods rob legitimate manufacturers of revenues and that poorly-made knock-offs harm the reputation and good name of luxury purveyors.

Mr. Johnson, vice president of legislative affairs at The International AntiCounterfeiting Coalition said that, for most brands, protecting their brand’s image is the highest priority. The selling of counterfeit goods can damage a company in various ways. The most obvious is the potential loss of legitimate sales, “particularly in the luxury segment,” said Mr. Johnson. But, even more, it can cheapen a brand’s image.

The easy availability of fake goods can cause “consumer confusion,” said Mr. Johnson. As the quality of fake goods increases, average consumers are having more trouble differentiating the authentic goods to the fakes, especially if purchased online. A flood of counterfeit products can also harm a brand’s reputation. Not only is the quality and design a direct indicator of the goods’ worth, but the reputation and image are what makes the brand desirable.

Right now, as the trade talks continue between the U.S. and China, there is a lot of uncertainty about what this might mean for on the counterfeit luxury goods market. There is some concern that if tariffs are imposed on real luxury goods, this will increase their cost, and buyers in both China and the U.S. might flock even more to the fake items.

Back at the Silk Market in Beijing, arrests in New York or global trade talks seem to matter little. Here, crackdowns on the sale of fake merchandise seem to happen infrequently.

For Xiao Diao, the fake goods seller, the Trump’s presidency has had no effect on her business, she said. In fact, she’s seen a growth in her sales on e-commerce platforms and the messaging app, WeChat to loyal customers living abroad. And as for any raids to her sales in her shop at the Silk Market, she said that “When they (law enforcement) come, the shops only sell non-labeled stuff,” said Xiao Diao.

In China, possession of counterfeit goods valued at less than 50,000 RMB, or around $7,500 is not a violation of the law. As a result, many vendors only display a portion of their goods to make sure that they stay below that threshold and hide the more expensive and higher quality fake goods behind bedsheets that divide their stalls. When I came to interview at the Silk Market, I purposely brought a real Louis Vuitton bag. With an expert eye, Xiao Diao quickly identified my bag as a genuine article and sensed she might make a sale. “I can tell you have good taste,” she said and smiled,” let me show you the good stuff.”

She opened up a hidden closet containing rows of well-made knock-off purses packaged in what looked like dust bags. These looked exactly like the newest fall Vuitton collections as seen in magazines and on celebrities. But they were one-twentieth or even one-thirtieth of the original price.

The “good stuff” as Xiao Diao referred to them, are made with the same raw material as the originals. She said manufacturers used real bags as models. Xiao Diao implied that a supplier purchased a real bag and then reverse engineered the purse stitch-by-stitch. She noted that the knockoffs are the exact same as the genuine ones from inside out.

Of course, there is no way of verifying this. But the array of bags she had on her shelves indeed looked and felt like the real purse I had with me.

“Some are done so well, they will never be recognized as fakes, fooling even the sales assistants at the flagship shops,” Xiao Diao said proudly.

Not all fake luxury goods are made with equal care. Quality can range from items that closely resemble the real product to those that are clearly — and sometimes even proudly — fake. At the Silk Market, vendors rank them from A products, which are the highest quality, down to lower letter grades, like C or D.

According to Xiao Diao, the difference in quality from a lower grade of leather is unnoticeable to the human eye unless you touch the bag or examine the seams inside. These types, with most being in the B-range, are usually sold at less sophisticated vendors on the streets. “C-grades or even Ds are what you see on the streets,’’ said Xiao Diao.

Xiao Diao tells me that most of her customers already own real luxury handbags. They buy fakes from her to keep their closets up-to-date with the latest collections.

INTELLECTUAL PROPERTY AND U.S. CRACKDOWNS

Heather McDonald is an intellectual property attorney at Baker Hostetler in New York who has been battling counterfeit issues for over two decades. She said that there are plenty of laws on the books to protect brands against counterfeiters. The problem is the lack of law enforcement.

“There are specific laws in 35 states making it a crime to sell counterfeits but you have to enforce the law,’’ she said, adding that “the police department does as good a job as they can. They have a lot of crime and a lot of resources that need to go to other crimes.” The NYPD did not respond to requests for comment.

Ms. McDonald explained that the business operations in New York are “not as sophisticated” as what takes place in China.

New York, she said, operates somewhat differently than China, she said. In New York, if a customer wants to place a large order, for say for 50 or 100 bags, the vendor will “take your thousand dollars, go to his buddy and ask for the model you asked for,” and so forth. Instead of each vendor accumulating a massive inventory, vendors operate within a supply network, helping each other out and each holding on to only a few items. She said that purchasers of counterfeits, by and large, are not the same customers as those who buy the genuine article.

Ms. McDonald used the example of a hair salon in Indiana that might want to keep an array of fake bags for sale to its customers and to add to the image of the salon. The salon’s owner might come to New York’s Chinatown in search of merchandise to mark up and sell.

“People will come to New York and they would want to buy a lot,’’ said Ms. McDonald. “So, they go to the corner and say I want these 50 items and it will cost a couple of thousand dollars. The seller would say give me a thousand dollars and, okay, meet me back here in two hours. And I’ll give you the goods.”

Ms. McDonald explained that a seller, let’s call him “Jimmy,” will then go to all his buddies who sell counterfeit goods and buy all the goods with that thousand dollars and then come back and hand over the goods while also pocketing the other thousand that he was given.

“That’s how the trade worked,” she added.

Joel Cohen, an attorney representing Qi Feng Liang, one of the defendants in last August’s federal indictment, has been working on counterfeit issues in New York for over two decades. He said he has been “lucky to become one of a few go-to men” among the Chinese community in New York.

From his experience representing Chinese defendants in similar cases, Mr. Cohen said, “most of these men aren’t criminals, they’re mostly just businessmen who don’t have a lot of respect of intellectual property rights.”

“Is there a dead body or 20 kilograms of heroin involved in this case that I am not aware of?” he said.

In the August 2018 seizure of $450 million in goods, the 33 largely Chinese defendants are accused of “attempting to smuggle and clandestinely introduce into the United States merchandise,” and attempting “to pass through the custom house one or more false, forged and fraudulent invoices and documents and paper.”

Mr. Cohen likens the current case to a similar case he was involved in 2007. In that case, Hwa Shan Wang, also known as “Sam Wang”, who was accused of smuggling $19.7 million worth of goods into the U.S. Mr. Wang and others were later “requested to forfeit all property, real and personal, that constitutes or is derived from proceeds traceable to the commission of the offense,” according to the court filings filed by the United States Attorney’s Office.

Mr. Cohen said he expects the outcome of the 2018 case will be similar to the result in the Wang case. He expects that the defendants will be fined, have their properties forfeited and face a couple of months of jail time. Nor will justice move quickly. Mr. Cohen said the case would most likely go on for a few years, and the government will fight very hard to put these people in jail.

Neither the Department of Justice attorneys representing the federal government nor the Attorney’s Office of the District of Eastern New York responded to phone calls or emails requesting a comment on the case.

CHINA’S EFFORTS IN PROTECTING INTELLECTUAL PROPERTY

There are many challenges facing regulators as they try to halt fake luxury goods. One of the problems is just defining it. Luxury goods analysts such as Naomi Yasakawa, co-author of Mckinsey and Company’s 2017 China Luxury Report said that these knock-off luxury goods, “technically cannot be considered as ‘luxury ‘products.” Still, the two markets — fake and real luxury goods — feed off each other.

One reason the counterfeit market is growing is because of the insatiable appetite by the Chinese consumers for high-end goods. The consulting company, McKinsey’s 2017 China Luxury Report says that “by 2021 China is expected to have the most affluent households in the world. And in 2016, it is estimated that 7.6 million Chinese households purchased luxury goods — a number larger than the total number of households in Malaysia or the Netherlands.”

The biggest demand for fake luxury goods is within China itself, where Western manufacturers are having a hard time clamping down on the practice. It is often nearly impossible to locate the manufacturers of these goods, as well as to get local Chinese officials to stop turning a blind eye to this practice.

Vittorio Franzese, a Shanghai lawyer who advises western luxury brands operating in China on intellectual property issues, said the majority of the fake goods produced in China are intended to be sold within its borders.

“Big brands have anti-counterfeiting teams or hire third-party agents to track down the source of the goods, but they almost never find them,” said Mr. Franzese.

According to a Europol study published in 2017 on Counterfeiting and Piracy, China and Hong Kong together were responsible for 86 % of global counterfeited goods in 2015.

And that is a major concern for multinational companies doing business in China. The annual Business Climate Survey conducted by the American Chamber of Commerce’s (AmCham) in Beijing shows that one of the biggest concerns for foreign companies operating in China remains the protection of their intellectual property, year after year.

Professor Tao Xinliang, Dean of the Intellectual Property School at Shanghai University said, “There is still a lot of room for improvement in China’s trademark laws and they still need to catch up with time. But that is not just a problem China is facing, it is a problem the world is facing together.”

Since most of the factories that make the counterfeit goods are in small towns scattered across Guangdong and Zhejiang, finding the exact source of the goods is near impossible.

Mr. Franzese added, “a few shipments get through customs every month, but the products sold abroad is minuscule compared to the overall market size’’ He added that of the shipments that go abroad, many of the wholesale buyers are in fact non-Chinese.

Even when luxury brands get tipped off that their goods are being knocked off and report this to the local Chinese municipal or provincial Administration for Industry and Commerce (AIC), a regulatory agency under the Chinese Ministry of Commerce, very little happens.

“If the resources are limited then the process can take days, and then they might miss the golden timing for the seizure,” said Mr. Chang of the Quality Brands Protection Committee, which represents American brands in China. “That’s when law enforcement is just not enough, and fake goods are then snuck out before the law enforcers get there.”

Mr. Chang added that “the magnitude of this is huge. I never complain the Chinese enforcement is not doing their job. The police have limited resources. The pattern of counterfeiting keeps changing, and the police are prioritizing this, and are improving their skills.”

Most manufacturers are fully aware that they are producing illegitimate goods for the black market, said Mr. Chang. Still, there are many other Chinese manufacturers who are completely unaware that what they are making is illegitimate when getting orders and samples of products from overseas customers. “They just don’t have enough knowledge of international markets,” said Mr. Chang.

“There are many professional traders outside of China and they pick up the newest best-selling product to send it to manufacturers to copy them,” said Mr. Chang. Some are Chinese, many from the Middle East region. For the factories “as long as there is an order, they’ll do it, they’re not doing their due diligence about the foreign buyers.”

Mr. Chang said that the Chinese government’s Administration for Industry & Commerce (AIC) along with customs agents and police were the backbone of fighting counterfeits across China. Brand owners could file complaints to local Administration for Industry and Commerce offices directly, and they would collaborate with the local police department and roll out raids as soon as possible.

But all that changed in early 2018, the Administration for Industry and Commerce department was restructured and was combined with several other food and drug safety, quality inspection and supervision of regulatory bodies to create a new regulator, called the State Administration for Market Regulation (SAMR)

For the moment, Mr. Chang is uncertain how effective the newly-created department will be in taking on these issues. The agency is “still fine-tuning how it can become the strongest enforcement agency,” he said.

The lack of resources in cracking down on fake goods is an issue both the U.S. and China share. For instance, Ms. McDonald, the intellectual property expert in New York, and other experts said that U.S. customs agents could only examine roughly eight percent of the goods entering the ports. As a result, many fake goods are snuck in without being detected.

Amber Li, a former intellectual property specialist at Hogan Lovells in Beijing, said that Chinese and Western governments must join forces if they want to halt the importations of fake goods. Both sides need to collaborate in establishing more rigid laws to protect trademarks and copyrights, as well as imposed stiffer financial and criminal punishments. Seeking justice at the moment is still not easy since “legal systems in China and the US are set up in a way brands cannot seek legal actions outside their jurisdiction,” she said.

E-COMMERCE

Like so many other industries, the counterfeit market else has been evolving with the digital age. Adaptations of e-commerce platforms, websites, and social media sales have changed the playing field for sellers of fake goods. Instead of stores, buyers are finding they can obtain fake luxury goods online directly from sellers.

In years past, Ms. McDonald, the intellectual property lawyer, said it was much easier to track down goods through customs “because they were mostly in warehouses or shipping containers.” But now, most seizures of goods sold online are just parcels and “will only have two or three goods in it,” she said. This means it’s increasing the seizures but not the number of items seized.”

On the other hand, new technology has also helped port authorities and customs agents who are now using databases, scanning, and tracking to identify better and tally shipments.

And, while there’s a global controversy over companies that sell user data, Mr. Chang of brands protection group in Beijing said that some e-Chinese commerce platforms are assisting the government in tracking down the suppliers of fake goods. They are sharing the data on purchasing trends and consumer information with law enforcement agencies.

Buyers who search keywords for manufacturing materials such as “sodium azide or potassium nitrate” might get picked up by the algorithms in relation to counterfeit auto airbag manufacturers. Mr. Chang said.

“Whenever Chinese police need info regarding a suspect online counterfeit goods seller, Alibaba, JD.com, etc. platforms provide needed info through due process,’’ said Mr. Chang. And local police forces then use internal software to “analyze big e-commerce data provided by the platforms to log on highly suspicious targets selling counterfeit goods.”

An Alibaba’s spokesperson in San Francisco who declined to provide her name said the e-commerce platform proactively takes down listing if their algorithm detects any bad practices. The representative said that Alibaba works with brands and takes leads to possible patent infringement and illicit products to the Chinese police as well as other regulators. There were near 1800 arrests made based on Alibaba leads between 2017 and 2018. And, Alibaba leads resulted in the closing of 1300 illegal manufacturing and distribution locations, according to Alizila, Alibaba’s news site.

Mr. Johnson, of the anti-counterfeiting group, said that his organization collaborates with Alibaba, in identifying counterfeit listings.

“Ever since 9/11, many companies have automatically volunteered date on shipments coming into the U.S. to U.S. Customs and Border Protection.” He added that information on a shipment’s origin, affiliated person or company are provided to officials if the parcel is associated with someone suspicious or a past seizure. Those packages are flagged and “by the time it gets to shipping hubs — where the international packages are arriving — customs already have a number of data points, and therefore be able to do pre-screening of packages,’’ said Mr. Johnson.

THE TRADE WAR

With the trade dispute still in the air, the effects of any possible higher tariffs and taxes on the counterfeit luxury goods market are unclear. Jonathan Gold is the vice president of supply chain and customs supply at the National Retail Federation, a trade association based in Washington, D.C. that represents more than 18,000 brands. He said that tariffs would have an impact on legitimate goods from China. As a result, he said that retailers are “trying their best to mitigate their impacts.”

“Most of our clients see the counterfeit and tariffs as two separate issues,” said Mr. Gold. On the school of thought is that those companies may move their manufacturing out of China, even makers of fake goods, to lower costs. But redeveloping a supply chain will require time, he said. It would mean finding a new location, recruiting skilled workers, building infrastructure, and learning the local regulations.

Even if there are higher tariffs, most companies won’t be pulling out of China immediately, said Mr. Franzese. High tariffs would only make genuine goods more expensive in China and give consumers more incentive to buy fake goods, he added. On the other side of the globe, even if exporters of fake goods to the U. S. disguise their goods as real and pay any tariffs, the profit margin is so high that it will still provide a lucrative income.

In the end, the counterfeit luxury goods market may be impervious to changes in tariffs.

“Even when tariffs are implemented they (knockoffs) will still be cheaper than the real goods,” said Mr. Franzese, the Shanghai representative of U.S. brands.

That’s good news for sellers like Xiao Diao, as she sells her fake bags in the Silk Market. Trade talks and multi-national disputes are hardly the cause for concern.

“We were really worried that Trump would affect us,’’ said Ms. Diao, “but it’s been two years now and my business has been the same. Maybe because we’re too small.”

See the revised short version published in SCMP here:

https://www.scmp.com/lifestyle/fashion-beauty/article/3007449/gucci-louis-vuitton-new-yorks-fake-luxury-goods-highlight