If East Asia is a classroom, then Japan sees China as the classmate copying its answers. Take the time China used a group project to allegedly steal its Shinkansen bullet train technology. Or when a Japanese research institute finds attempts by its naggy neighbor to hack its information systems more than 10 billion times in 2014 alone. Now their schoolyard rivalry has made it to the cafeteria, where a new battle is emerging — a fake food fight, if you will.
The number of fake Japanese food brands sold illegally by overseas vendors has increased fourfold in the past year, the country’s Agriculture, Forestry and Fisheries Ministry found in April. About 80 percent of the websites selling this fake food were based in China. Nearly 700 products were confirmed as fraudulent, using the labels of respected Japanese brands like Kobe beef, Yubari melon and Nishio no Matcha tea to artificially raise their sales prices. These brands are considered “some of the most desirable, and most expensive, in the world,” making them a prime target for counterfeiters, says Daniel Bob, a visiting professor at the School for Advanced International Studies at Johns Hopkins University. Plus, melons are cheaper to hawk than, say, computers. “You can make a lot of money,” Bob says.
Intellectual property theft in agriculture directly undercuts what the Japanese have tried to do.
Daniel Bob, Johns Hopkins University
This rise in fake fruits and other agricultural products is emerging as the latest flash point in Japan’s already tense relations with China. Japan accuses China of unilaterally claiming a part of the East China Sea. With the U.S. withdrawal from global trade pacts like the Trans-Pacific Partnership and the protectionist tariffs imposed by the Trump administration, Japan and China are also vying to assume the mantle of world trade ambassador. And that’s where this latest irritant in ties threatens to hurt Tokyo the most.
“Intellectual property theft in agriculture directly undercuts what the Japanese have tried to do,” says Bob.
Here’s how. Japan is “pushing forward to set the rules,” Bob says, including those on intellectual property. It was a leader among the 11 Pacific Rim countries that vowed to continue pursuing a free-trade deal after the U.S. left. But it hasn’t been easy, politically, for Prime Minister Shinzo Abe. Japanese farmers were opposed to the original TPP agreement because of an agricultural sector that was inefficient but politically influential. For a long time, Japan was not interested in exporting farm products, says Kazuhito Yamashita, an agricultural policy expert at the Canon Institute for Global Studies in Tokyo, using whatever means available, including tariffs, to “protect its own domestic market,” he says.
To placate those farmers and gain support for the TPP, Abe’s pro–free trade government promised to promote the quality of Japanese agricultural products globally, building brands around some of the world’s best oranges, beef, melons and strawberries. The expectation was that a rising middle class across Southeast Asia, born of the trade deals, would make customers more willing to pay the premium that Japanese products demand.
The success of the Chinese fake food industry undermines the Japanese government’s arguments to its own people. It also imposes risks beyond just economics. From crops thick with pesticides to baby formulas that have poisoned babies, China’s food industry has a less than stellar health record.
It’s by publicizing their research into websites selling fake food that the Japanese are fighting back. Setting tariffs against Chinese goods in retaliation is an option, but a trade war with Japan’s largest trade partner is fraught with danger. The fake food crisis is “regrettable,” but “negotiations” with China are the way to go, suggested Japanese agriculture minister Ken Saito at a media briefing in April. Alternatively, Japan could take a complaint to the World Trade Organization and force a resolution there. After all, the West’s — and Japan’s — goal in getting China to join the WTO two decades ago was to get Beijing to follow global rules more closely, while also creating a middle class that would ultimately force it toward “a more open, democratic society,” says Bob, who worked on those negotiations as part of the U.S. Senate Finance and House Foreign Affairs Committees. The hope was that China would follow the path of South Korea, Taiwan and Singapore, from authoritarian government to trade-friendly democracy — though “it hasn’t worked as well as we touted it in the ’90s,” admits Bob.
China under President Xi Jinping is cracking down on organized crime and counterfeiting operations — from fake beer to synthetic chemicals — in a bid to improve the country’s international image. But Japanese experts worry that fraudulent food, while important for Tokyo, is unlikely to be a priority for Beijing, compared to its larger black markets in everything from computer software to human trafficking. Even if the central government is interested in exercising stricter control, China is a vast country with local bureaucracies willing to turn a blind eye to counterfeit goods, making enforcement challenging from Beijing. Already, says Yamashita, major Japanese brands like Koshihikari rice have been registered as trademarks in China, leading to a foreboding conclusion from the Tokyo trade expert: “It is next to impossible to change this situation,” he says.
But history holds out hope — however thin. Chinese farmers used to mimic American tobacco, developing an illicit trade that exploded from the late ’90s to late 2000s. But as local tobacco brands developed reputations of their own, Chinese companies petitioned the government to enforce their local trademarks, leading to a crackdown on all illegal infringement. Tobacco authorities seized nearly 200,000 counterfeit cigarette cartons in the first half of last year, and those who sell counterfeit cigarettes worth more than 50,000 yuan are now punished, the worst offenders even sentenced to life in prison. A repeat with food is what Japan will hope for. “It’s not Chinese versus Japanese, but Chinese versus Chinese,” Bob says. “That’s when, inevitably, there will be much greater interest from the central government to make sure these things don’t happen.” Think about it as the day Chinese food counterfeiters are finally sent to the principal’s office. Till then, the classmates have another reason to fight.
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