Foreign businesses hate Chinese copycats - unless they've got a good deal on a handbag

GUANGZHOU, China - Thousands of foreign buyers flock to this southern city at this time of year for China's biggest trade show. They search for factory owners who will make their products cheaply and won't rip off their clever designs.

Then, they slip across town to malls loaded with fake Prada purses, phoney Rolex watches and pirated Tod's loafers - all sold at a fraction of the original's price.

"I've been in these stores where when you ask for knockoffs, they take you into a back room with shelves lined with fake handbags," said a footwear buyer from Milwaukee, Wisconsin, who only identified herself as Kathy because she feared problems with customs.

The shopping shows how the piracy problem is much more complex than it is usually portrayed. It's not just about creative foreign companies who are struggling to keep unscrupulous Chinese copycats from stealing their ideas. Often, the foreigners behave in a way that encourages the theft of intellectual property.

"Many buyers come here and talk about intellectual property rights, but then they'll show you their rival's product and ask if you can copy it," said Alyn Wong, a sales representative for a luggage company in the eastern province of Fujian. "It seems kind of contradictory. But that's the way the market works."

Wong was surrounded by colorful backpacks with the slogan "Love-Take Off-Good" in her company's booth at the Canton Fair, a biannual event that for five decades has been China's biggest trade fair. The show offers a head-spinning variety of goods - everything from saxophones, fishing lures and hammers to espresso cups, toothbrushes and motorcycles.

Attendance at the show plunged last year at the start of the global financial crisis. But in a possible sign of the economy's recovery, the number of visitors started to bounce back at its 15-day autumn session, which ended Wednesday, organizers said. The event attracted 188,170 foreign buyers - a 13.7 per cent increase from the session last spring, they said.

Although there's a thick atmosphere of giddy dealmaking and browsing at the fair, there's also a palpable sense of paranoia. Most exhibitors won't allow photographs of their goods for fear the pictures will be used to copy their products. Chinese citizens aren't even allowed to attend unless they have a special pass as an exhibitor, translator or domestic buyer - a process that involves an arduous background check.

During the middle of the fair, U.S. Commerce Secretary Gary Locke spoke at a conference about intellectual property rights at a hotel across the street from the massive fair complex.

"If innovators fear that their inventions or ideas will be stolen, then one of two things will happen: They'll either stop inventing, or they'll decide to create their inventions elsewhere," he said.

His speech focused on what China needed to do to combat piracy. Tougher laws and more crackdowns were needed, he said. His message: It was mostly China's problem.

But most of the shoppers strolling around the warren of tiny boutiques at the Guangzhou Baiyun World Leather Trading Center were foreigners. They were haggling and snapping up an eye-popping array of fake designer goods in the three-story mall, about a half-hour taxi ride away from the Canton Fair. Shops with names like Ladybug, Teli and QQ Bear were full of bags emblazoned with the Gucci, Coach and Prada logos.