Economy

Fake cigarettes stubbed out better jobs

By Peng Yining (China Daily)
Updated: 2011-05-11 15:42

Pocket money, plus

After the crackdown began, wealthy counterfeiters left the remote town and headed to big cities for other business. The people who worked for them saw their earnings cut off and had no place to go.

Yunxiao's economy suffered a stunning recession: The county's annual revenue dropped by 21.5 percent in 2001. In 2004, annual per capita industrial output was less than 600 yuan, according to official reports.

Unlike people in other remote townships in China, few Yunxiao people went to big cities as migrant workers. "If you could make money at home, why would you leave?" Luo said.

"I would definitely be a counterfeiter if my dad hadn't sent me to the army after high school. He didn't want me to take over his business. He said it was disgraceful work, no matter how much money it could bring in."

Luo said he earned 800 yuan a month working in a clothing factory in Quanzhou, a coastal city near Yunxiao, but wrapping cigarettes could easily bring in more than 3,000 yuan a month. Running your own cigarette factory was more lucrative.

Zhang Xiuxian, 21, also was eager to join the business. She told China Daily that counterfeiters will pay 0.6 yuan for packing 10 packs of cigarettes. "I saw 7-year-old kids doing the packing quickly and neatly," she said. "A skilled worker can easily make 60 to 70 yuan a day."

She said people could find packing opportunities by asking their friends or neighbors, because almost all of the 5,000 people in her village worked at counterfeiting factories. "Every day after school, my classmates went to pack cigarettes, making a little pocket money."

Lots of student quit school to make more money. Zhang said nearly one-third of her classmates didn't finish junior high school.

For fear of punishment, Zhang now works in a factory that makes jumbo television screens, part of the county government's project of developing an optical components industry to eliminate the fake cigarette industry.

Trying for turnaround

"People will give up counterfeiting only when they are able to find a legal job," said Guo Ling, director of the project, which was launched in 2007. She said county officials had to go into villages, knock on people's doors and try to persuade them to give up making fake cigarettes and go to legal factories. But 1,000 yuan in monthly wages were not attractive enough for locals.

"At first we only hired workers 18 years old to 35," Guo said. "Later the range expanded to 18 to 50, and now anyone with normal eyesight is qualified."

Chen Meiyu, 33, told China Daily that making fake cigarettes is profitable and unconstrained. Someone can work at home and take care of family and farmland at the same time, she said.

To attract housewives, who make up the majority of cigarette packers, government-supported factories allow female employees to take home their work, including spooling wires on reels and assembling components, so they can look after their babies while working.

The county also founded small village workshops and set up flexible work hours, catering to locals who are not used to a 9-to-5 schedule.

Fang Meiyan, 40, owner of a workshop producing small components for county factories, said she could find only four workers in 2009, but the number has increased to 40 with higher wages and the continued push against counterfeiting.

A report by the provincial anti-counterfeit department said that through 2009, the department had destroyed 2,793 fake cigarette workshops and had confiscated 8,505 tons of tobacco and 58,626 shipping cartons of fake cigarettes.

"There are only a few counterfeiting workshops left in Yunxiao," Zhuang Yutu, a senior officer, was quoted as saying in a journal produced by the tobacco administration. "They used to be easily found in every village, but now they are rapidly disappearing."

'A good start'

Authorities say they have made a significant dent in the industry, but its notoriety shadows county efforts to build a legitimate economy.

"We wrote more than 20 emails to a Hong Kong investor to explain Yunxiao is developing legal industries and is not making fake cigarettes anymore," said Fang Jianlin, deputy director of the county project. "It's hard to attract investments with a damaged reputation, and the counterfeiting might make a resurgence without the development of a legal industry based on investments. It's a vicious circle."

Luo Mingxiang, who founded a light emitting diode (LED) factory in Yunxiao in 2008, worries about the sale of his goods.

"It's not a good sign if your customers associate your products with fake stuff," he said. "And after decades of counterfeiting, the county's manufacturing is generally undeveloped."

"Yunxiao has paid a price for counterfeiting, but we will rehabilitate our reputation like many other Chinese cities did before," said Guo, the county's industry project director. In Fujian province, Jinjiang was once famous for counterfeit medicine, and Quanzhou was known for its fake clothing brands, she said, but now businesses are developing rapidly after going through uneasy industrial transitions.

"We have to change, as the counterfeiting won't bring long-term prosperity," she said. "I believe the optical component industry is a good start for Yunxiao. We already have invested 8 billion yuan, founded more than 160 factories, and provided over 18,000 work opportunities."