The global conversation around counterfeiting has long followed a familiar arc: Brands built in the West are plagued by counterfeiters looking to piggyback on the reputation of – and demand for – these trademark-bearing goods, and China is the primary source of this seemingly endless flow of fakes. But that well-established narrative is showing early signs of cracking. While the $500 billion-plus global market for counterfeits is not slowing, the dynamics of this economy are changing, as China looks to become a creator of intellectual property in its own right, and manufacturing shifts out of the mainland, which has long held the title of the counterfeit capital of the world.
Behind this shifting landscape is a modern-day Beijing, which is no longer content with being the “world’s factory” – on both the legitimate and counterfeit fronts. Over the past two decades, the country has intensified efforts to move up the value chain, heralded, in part, by the Chinese government’s launch of various programs and policies – many of which were aimed at producing globally competitive brands and proprietary technologies, not just OEM goods.
This transformation is starting to bear fruit across industries: Tech titans like Huawei have gained global recognition for their IP-intensive operations; BYD overtook Tesla to become the largest electric vehicle manufacturer in 2024; DJI, Anker, and Xiaomi are dominating patents and exports; and sportswear companies like Anta Sports, Li-Ning, and PEAK are garnering both domestic and international followings.
Across consumer categories, “Made in China” is increasingly becoming synonymous with more than just imitation.
A Shifting Landscape
This pivot is not just economic – it is strategic, and China is seeing the effects in more ways than one. In particular, as China continues to gain stature as an originator of IP, it is also becoming a target for counterfeiting. In a reversal of roles, Chinese authorities are increasingly working to block imports of goods that infringe the marks of domestic companies, rather than merely seizing fakes destined for export.
Evidence of this reversal comes into sharper focus in the 2024 edition of “Typical Cases of Intellectual Property Protection by China Customs,” an annual report issued by China’s General Administration of Customs. The latest report outlines how enforcement bodies are deploying increasingly sophisticated and coordinated tools to police IP rights – not just for foreign brands, but crucially, for Chinese companies as well.
While cases involving counterfeit UGG, Timberland, and Decathlon goods are highlighted in the latest version of Typical Cases, the standout theme was not the enduring presence of fake foreign goods, but how the counterfeit economy is shifting in response to the offshoring of manufacturing. As the General Administration of Customs notes, enforcement is adapting to “novel challenges” posed by the migration of counterfeit production out of mainland China and into nearby countries.
In a notable instance, Customs stated that “integrated enforcement is helping protect China’s creative exports, especially as Chinese IP gains popularity overseas.” Another goal emphasized in the Typical Cases report is to “reinforce China’s brand image abroad,” and a separate case focused on counterfeit seizures demonstrates China’s increasing oversight of IP violations within the booming cross-border e-commerce sector – a critical growth engine for both legitimate and illegitimate trade.
As manufacturing continues to shift to Southeast Asia, including Vietnam, Cambodia, and Bangladesh, offshoring can create new enforcement blind spots and opportunities for counterfeit production; meanwhile, other factors – such as evolving trade routes, changes in customs enforcement strategies, and the rise of cross-border e-commerce – also play significant roles in reshaping the counterfeit landscape.
Against this background, China is finding itself on the receiving end of imported counterfeits. Official figures show that more than 80 million suspected counterfeits were detained throughout 2024. And while the General Administration of Customs’ report does not specify what percentage of these seized goods targeted domestic Chinese brands (making it difficult to isolate the full scope of counterfeit imports aimed at China’s emerging IP creators), the report, nonetheless, suggest growing attention to the threat.
Products that were once counterfeited within China are now increasingly being faked abroad and shipped back in, prompting a shift in customs strategy. The same networks that once thrived inside Guangdong’s industrial zones are now operating beyond China’s jurisdiction. At the same time, the goods being faked are starting to look a little bit different; not limited to copycat versions of Western brands’ offerings, counterfeits now extend to Chinese-branded goods like Li-Ning sneakers, Perfect Diary cosmetics, and Anker electronics, making enforcement both more complicated and more urgent.
The evolving crackdown by Beijing is not just about brand protection – it is also about positioning. Chinese authorities see IP enforcement as vital to China’s global brand credibility. It is a form of soft power, signaling that the country can protect not only foreign interests, but its own innovators. Customs enforcement now regularly collaborates with regional counterparts and deploys tools like big data monitoring and digital shipment tracking to fight infringement across borders.
The cultural landscape is changing, too. There is a growing emphasis on protecting domestic brands, with younger Chinese consumers increasingly valuing authenticity. This shift supports a broader national strategy: enhancing China’s global brand credibility through more stringent IP enforcement. As nationalist consumption patterns take root and homegrown brands gain cultural significance, tolerance for knockoffs – especially of local labels – is fading and protecting brand integrity is becoming a matter of both economic and cultural pride.
What This Means for the Global IP Ecosystem
The implications of this shift – with China increasingly becoming both a target and enforcer of IP rights – are potentially profound. Yet, for the time being, most other signs point to things being status quo when it comes to China and counterfeits. The OECD, for instance, released its Mapping Global Trade in Fakes 2025 report this month, highlighting the growing sophistication of illicit networks – leveraging e-commerce, postal services, and free trade zones – to move counterfeit goods ranging from luxury items to dangerous products like fake pharmaceuticals. The OECD identified EU-based companies and consumers as major victims of counterfeiting, with China and Hong Kong remaining the leading sources of such goods.
Around the same time, the U.S. Trade Representative (“USTR”) released its annual Special 301 Report, which stated that China continues to be the main source of counterfeit goods globally, especially in the luxury fashion and accessories segments. The USTR pointed to China’s failure to fully implement IP commitments under the Phase One U.S.-China trade deal, including on trade secrets, counterfeit goods in transit, and online piracy. Bad faith trademark filings remain widespread in China and the use of regulatory pressure to force technology transfers from foreign firms is a key point of alarm, according to the Special 301 report.
As China evolves from the world’s manufacturing hub to an increasingly powerful producer and protector of intellectual property, the global counterfeit economy is being reshaped. While China remains a leading source of counterfeit goods, its growing stake in IP creation is prompting a more proactive enforcement posture – one that now includes defending its own brands from infringement. This dual identity, as both a historical epicenter of counterfeiting and an emerging IP enforcer, signals an intriguing pivot.
For global stakeholders, brands, regulators, and policymakers, alike, this is a moment to recalibrate assumptions about where the next IP battles will be fought, and who will be leading them.
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