No Olympic knockoffs

CNN's Eunice Yoon reports on how China is cracking down on counterfeiters for the Olympic games.

China.  It’s often referred to as the factory of the world.  An economy built on the back of manufacturers. Just a 45-minute journey from Hong Kong, the port city of Shenzhen is a center for business and shopping.  It’s also a hub of illegal trade.

A lot of tourists know, just across the border from Hong Kong into China is a nexis point or a place to go to by counterfeits.

For years, luxury goods makers have hired private investigators like Ted Kavowras to try to end the production and sale of these bogus goods.  But the fight against fakes here has been a grueling uphill battle.  For the Beijing Olympics, we had heard Chinese authorities were cracking down on counterfeiters, carrying out more raids like this one.  So, we crossed the border to Shenzhen to see the situation for ourselves.  At first, it seemed, not much had changed.

This place is famous for its fakes, and it’s right across from the train station.  We had only been here for about 30 seconds before people started coming up to us to try to sell some of their bags.

But quickly, we found sellers had altered their tactics.  Instead of taking us to the mall, we were led to a nearby hotel, and inside one of the rooms, bags concealed and sold illegally in an effort to evade the police.  Later at the mall, we found other operators selling counterfeits, but storing them in secret chambers.  This vendor agreed to speak with us if we didn’t use his real name.  He told us to call him “Dee.”  Business is a bit harder now, he says, but we have hired people to follow the inspectors and tell us when they are coming.

So this is what we got.  This is a fake Prada bag.  This is a fake Louis Vuitton bag. This is actually supposed to be from the summer 2008 collection.  Take a look at the quality of it and the workmanship.  This Prada bag actually even comes with its own certificate of authenticity.

Catalogs like this one are in hand at stores like Dee’s, so buyers can order their own branded bags.  This issue is targeted at Olympic shoppers.  Buying fakes is not against the law here, but selling them is.  Dee says he is still willing to take the risk.  I have to make a living, he explains.  Protecting jobs and social stability have been priorities for the Chinese government.  That’s why some people argue authorities here have been slow to shut down illegal manufacturing by factories like the one shown in this video shot by private investigators.  Some international companies say Beijing should be doing more, and not just to save face in front of overseas guests.  Kavowras says he’ll take whatever help he can get:  “It’s a worldwide issue.  Customers from overseas, everywhere in the world are driving it.”

But perhaps not as many customers during the Olympics.