Shanzhai in Shanghai

I just returned from Shanghai Tuesday night, and while the trip had many great aspects, the one that was especially interesting for this blog was how knockoffs were sold. Near some of the major tourist attractions, like the City God Temple, nearly all the tourists were Chinese. (It was the end of the “Autumn Moon” holiday.) But when my wife and I were spotted by a seller, we were quickly shown a folded flier with photos of knockoff watches and handbags. What was most interesting was that all over Shanghai, every seller seemed to have the identical flier with identical pics–in other words, a standardized system of knockoff advertising.

The other interesting thing I learned was why the lines for major Western luxury goods stores, like Chanel, are so long in Hong Kong. It’s not just about the love of conspicuous consumption–though I heard many stories in Hong Kong about Chinese mainlanders coming in and buying whatever was the most expensive item in the store. In Shanghai, the same stores exist but there are no lines to get in and no velvet ropes outside to contain the crowds. The reason is that taxes are much lower in Hong Kong. Newly-minted Chinese millionaires may love to show off the most expensive Western brands, but they still try to pay as little as they can. No surprise there.