Recent iPhone Smuggling in China

Feb. 28 (Bloomberg) -- Bloomberg's Emily Chang reports on Chinese customs officials announcing the arrest of a man attempting to smuggle 30 iPhones into mainland China. Authorities have seized more than 3,000 devices this year. She spoke yesterday on Bloomberg Television's "Bloomberg West."

The Ivory Trade

Ivory is a raw material that can be taken from hippopotamus, walruses, narwhals, and many other animals, however, the best quality ivory is found in the tusks of Elephants.  It is used to manufacture products such as handles for cutlery, billiard balls, gambling checks, chess-men, napkin-rings, and more.  Ivory-carving has long been a part of China’s culture, and there it is mainly used to produce ivory chopsticks, bangles, engravings and other products which people indulge in to show off their wealth and social standing.   The Chinese have been said to master the fine work in ivory carving and due to the cheap labor there it is a target marketplace for ivory sellers.  The demand for the above products increase as individual wealth in China grows, which also contributes to the appeal of China as a place to sell ivory.

Background of the Ivory Trade:

Due to the great demand for ivory, the poaching of Elephants has become a serious problem.  CITES (the 175-nation Convention on International Trade in Endangered Species) banned the international commercial trade of ivory in 1989 by putting African elephants on its endangered species list, where items are strictly prohibited, after drastic declines in elephant populates across the world.  According to “Illegal Ivory Trade Flourishes once again”, an article from the Shanghai Daily, “between April and September of last year, 4, 759 pieces of ivory tusks were confiscated around the world,” meaning the remains of more than 2,000 slaughtered elephants were found within those six months alone, with most of them likely on their way to China to be carved into a luxury item, rather than something that is a necessity.  

Is the Ivory Trade really banned?

Although CITES initially banned trade, it is unrealistic to think that this means trade will stop.  Rather, it just leads to smuggling as a popular channel for bringing in new supplies.  In 1997, CITES agreed to a stockpile sale or “one-off sales” of ivory in which Japan was able to purchase 54.6 tons of ivory, coming from Botswana, Namibia and Zimbabwe.  Another stockpile sale was approved in 2007, allowing China to join as a trading partner. 

The reasoning behind CITES allowing for such trade to occur include requests from African countries (where the majority of elephants are found) claimed that they “needed money to fund their animal-protection activities,” meanwhile the target market countries such as China and Japan, noted that they need the raw ivory, which their own countries lack, to continue the art of tusk carving, an ancient part of their culture which they wish to keep alive.  It is ironic how countries in which there are endangered species are willing to continually hurt these particular species in order to fund their supposed protection of them.  It is also saddening on countries who continually participate in the purchasing of these raw materials, when they are mostly being used to manufacture things that are merely for show or entertainment.

Illegal Sales

In order for China to be able to participate as a trading partner in the auction they had to meet CITE requirements.  In order to do so, they created a new ivory registration system in which every piece of ivory sold needed to have documentation, and that only operations with government licenses could participate in legal ivory trade.  The International Fund for Animal Welfare performed investigation in Beijing, Shanghai, Guangzhou, and Fuzhou in September and October of last year, to determine the status of the ivory trade in China.  They found that of the 158 ivory factories and shops visited, only 57 were approved by the State Forestry Administration and the Ministry of Commerce meaning two-thirds of the factories and shops visited were illegally participating in the trade.

What can be done?

The Chinese government insists that it has not been ignoring the smuggling and illegal trade of ivory, however, it is apparent that not much is being done to stop it.  The government in China plays a major role in the functioning of its companies, and the fact that only one-third of the ivory factories were legal shows that they are clearly not being monitored.  It is way too easy for this illicit trading to continue, as the demand and price for goods made of ivory continually increases, with growing personal wealth in China.

 Many people do not sympathize to the fact that an innocent species is being exterminated, but when will it stop? Once elephants and other animals have been completely wiped out and there are no longer any sources of ivory?

There are people out there campaigning to save endangered species and help end trades such as the ivory trade.  To help joing the fight against the ivory trade in China you can petition against it by visiting sites such as the following, http://www.thepetitionsite.com/takeaction/168/639/035/ .

Counterfeit iPhones in China

After writing the Proview vs. Apple blog, I came across the following article from Fobes:
China's Black Market Boom

As stated in the article, "regardless of the state of the global economy, one robust sector that adjusts as efficiently as any other in the world is the Chinese black market. Despite years of official rhetoric about cracking down on pirated products, the urge to make a quick buck through imitation remains so entrenched in China that it has matured into a celebrated culture of its own... Bandits supply these markets with phones that come with the superficial look and feel of brand-name handsets but at a fraction of the price. The posters for iPhone look-alikes invariably superimpose their product name on a screen shot of an actual iPhone, without bothering to change the cell signal in the upper left of the screen that reads 'AT&T 3G.' These smart phones sell for as little as $100, where a real name-brand version might sell for three to six times that much."

In light of the Apple v. Proview feud, critics of the case should be quick to note that this is not the first time Apple has had strained relations with the Chinese. Problems with a black market had occured before with the sale of counterfeit iPhones which could cause alarm for a greater chance of a sale of counterfeit iPads if the ban continues.

Apple vs. Proview

Apple and Proview Dispute: Who owns the iPad trademark?

Who owns the rights to iPad?

Is it Apple or is it a Chinese company, Proview? Proview held a press conference saying it’s in the process of choosing from among three U.S. law firms to sue Apple in the U.S. for $2 billion. In the meantime, it handed out an ad to reporters showing its iPad — or Internet Personal Access Device. The Proview iPad, which it says it spent $30 million developing, looks more like the old iMacs than a tablet computer (Guglielmo).

According to Apple, it bought and registered all of the trademarks for iPad before it was released in 2010. Originally, Proview owned the trademark in eight different countries- two of which were in mainland China. As stated by Forbes staff, Connie Guglielmo, “it bought all trademarks for the iPad name in December 2009 from a Proview Group subsidiary for £35,000 (or about $55,000). Apple says that after talking to Proview Holdings, Proview Electronics and Proview Shenzhen, it cut the deal with Proview Electronics, which it was told owned the China trademarks.” Shouldn’t this deal be enough to prove that Apple in fact does own the trademarks? Unfortunately, it’s not, and the Chinese courts remain loyal to the Chinese company.

An Apple spokeswoman stated: “We bought Proview’s worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple in China and a Hong Kong court has sided with Apple in this matter.” Apple lost that case in mainland China, but it is appealing to a higher court where it can use as evidence from documents that Proview had provided to the court in Hong Kong. One of the documents follows:

A few emails, like the one above, between Apple’s special-purpose company and Proview seem to show that it did own all of the trademarks.

Apple, which had lost a court ruling in Shenzhen recently, must stop selling the iPad or pay more than 10 billion yuan ($1.59 billion) to Proview if it loses the final court rulings in China, industry insiders said.

“Perhaps further chipping away at that credibility is Proview’s statement regarding the iPad itself. Referring to a supposedly similar product for which the iPad name was designated by Proview in 2000, Yang said, ‘We spent a lot of resources on it. It's the same concept as the iPad today, except that back then, there were practically no LCD screens.’ Asking the public to believe that Proview, a largely unknown display company, was poised to unveil the original iPad back in 2000 is not an argument likely to win many believers” (PC Mag).

It’s interesting to note that Proview is deeply in debt and hopes via its lawsuits to lift the possible trademark transfer value, according to research firm Analysys International.

Ban on iPads

While some retailers in China say they’ve stopped selling the iPad while the dispute lingers, Apple will continue to sell them in their four retail stores in mainland China.  According to Economic Times, Suning, the country's leading electronics seller, said Friday it was halting sales of iPad, following similar actions by major online shopping sites like Amazon.cn and 360buy.com. However, many Chinese are huge fans of Apple products, so to completely stop selling them could lead to a black market for iPads, in addition to the counterfeiting of the iPad. 

Chinese Authorities Seize iPads

The Chinese authorities started to remove iPads from stores in certain parts of mainland China. According to PC Mag, “the first report of iPad seizures were revealed by the Hebei Youth Daily, and told of inspection teams confiscating roughly 45 iPads from Shijiazhuang stores in Northern China. As news of the seizures spread, many retailers in the area began voluntarily removing the iPad from store shelves to avoid having the device confiscated.” For many retailers, the iPad customers are a huge source of revenue- to stop selling them means losing money. People that come into stores for iPads also purchase other things such as accessories for them or other products of interest in the stores. By seizing the iPads, Chinese authorities are adding further hype and upsetting many people. Who do they remain more loyola to- their country or a company whose products they love?

Is this affecting Apple's stock?

If sales are going to decrease, would this signal a decrease in the stock? 

Should Apple settle or fight it out in court?

What do you think? Comment on the following:

Do you think Apple will win the case? Will Apple be forced to come up with a new name for the iPad in China? What would you call the iPad if you had to give it a new name in China? Do you think this is China's way at attacking American business and presence in their country? Will this force Apple to rethink where it does business and avoid China? Will Apple do more work and business in Europe now?

http://economictimes.indiatimes.com/tech/hardware/chinese-retailers-stop-apple-ipad-sales-as-proview-dispute-intensifies/articleshow/11942263.cms

http://www.forbes.com/sites/connieguglielmo/2012/02/18/apple-keeps-selling-ipad-in-china-as-trademark-dispute-escalates/

http://www.pcmag.com/article2/0,2817,2400165,00.asp

http://www.pcmag.com/article2/0,2817,2400281,00.asp

"...And Great Britain Waged A 'Wicked' Drug War"

"When Opium Was Cheaper than Whiskey..."

"These [opium] bottles, dating to the late 1800s and found in the remains of a small mining town several hundred miles north of Vancouver, are a silent testament to the end of an era, when Great Britain waged a "wicked" drug war "for the lucre of gain," opium was cheaper than whiskey, babies where "quieted" to death, and a lonely miner might have traded his last, hard-won flakes of gold for a few minutes of "heavenly bliss," only to awaken more lost and lonely with the dawn."

Soaring Drug Abuse in China's South

The Black "Organ" Market

            Illegal organ trafficking is a worldwide epidemic. According to Miracles for Life Worldwide, 19 people die each day waiting for an organ transplant. This may seem insignificant, but every 12 minutes, another person is added to the waiting list. Whether it is a kidney, liver, or heart, these afflicted individuals are involuntarily forced into a life or death situation where finding a replacement organ is the only escape.

            Those hanging on for life face a potential six to seven year wait before a suitable organ becomes available. This state of paralysis is essentially a death sentence waiting to happen. Fortunately for these patients, “the black market is a short term solution” (Goodwin).

            Although laws regarding organ donation are highly monitored, illegal organ activity is not unheard of. The Chinese market is the paramount location for illegal activity. With many small private clinics and hospitals spread throughout the nation, it is difficult for the Chinese government to regular organ trafficking. China’s black market allows patients to acquire a new organ in a matter of weeks, even days. Such speed is unheard of in countries that rely on pure altruistic giving.

Behind Closed Curtains

            The vast majority of illegal organs derive from the bodies of executed criminals that are given the death sentence for even the most minor injustices. According to CNNWorld, “only 11,000 transplant operations…are performed each year…More than 90 percent of those organs come from executed prisoners.” (Chen). The fact that executions of this nature are legal in China makes this type of illicit activity easier to get away with. Amnesty International states that more than 4,500 Chinese prisoners are executed each year with bullet to the back of the head because it preserves internal organs, as opposed to lethal injections.  

            A recent discovery revealed that a kidney from a living donor keeps someone alive for twice as long than one from a cadaver. This revelation gave rise to underground middlemen to seek out impoverished individuals willing to sacrifice organs for monetary compensation. These middlemen transport patients to an undisclosed hospital for a “broker-friendly” surgeon to conduct a series of blood tests to ensure the health of the organs. Before conducting the surgery, the middleman compensates the patients with anywhere from $6,000 to $10,000 cash, and then turns around to sell it anywhere from $100,000 to $150,000, depending on the organ. After swearing to secrecy, the patient is then provided with transportation back home.

Laws and Regulations

            In 1984, China mandated the “National Organ Transplant Act,” which states that organs of executed prisoners “could be harvested if no one claimed the body, if the executed prisoner volunteered to have his corpse so used, or if the family consented” (PrisonOrgans). This law also requires that a national registry is kept for organ matching, and that a federal contract is signed before surgery.

            These laws only facilitate organ trafficking because in China, having a family member in prison is a financial burden. Families of prisoners are indebted to pay for their rent and ‘if the individual is to be executed, the family is to compensate the government for the bullet and to remunerate the funeral arrangements” (PrisonOrgans). Because of these expenses and the shame it brings, families are usually willing to grant execution. This law is useless, as it simplifies the process of obtaining organs illegally.

            In 2007, China made it “illegal for living donors to donate organs, except from spouses or blood relatives” (Moxley). This law only provokes more illegal activity because if patients are unable receive an organ within their family, the black market is their only hope for survival.

            With illegal trafficking persisting, “The Ministry of Health recently announced it would crack down on medical facilities found conducting organ transplants without proper qualifications, levying large fines and ordering the hospitals to conduct institutional overhauls or risk closure. Staff found breaking laws will be stripped of licenses, and officials in charge will be removed and held legally responsible” (Moxley). This constraint is only making it harder for patients to live, which is why these laws must to be reformed.

Solutions

            “1.5 million patients are enlisted on China’s organ transplant waiting list, with the number of registered donor only about 10,000” (Coonan). With the Chinese laws facilitating illegal organ donations and making it hard to donate, I don’t blame the thousands of unregistered voters for not signing up. If monetary compensation is the only incentive donors seek, there is no incentive to donate legally.

            To minimize this illicit activity, I think individuals should receive incentives for signing up as an organ donor on their driver’s license. This will not only provide benefits to the donor, but it will reduce the wait for individuals patiently awaiting for a legally obtained organ.

            Not only will financial incentives be provided to registered donors, but those who voluntarily donate an organ should receive compensation as well. "Other compensation could also be considered, such as tax rebates, medical insurance or tuition wavers for donors’ family members" (Moxley). Reviving a system of voluntary donation is a long-term goal but with these small steps, illegal means of organ donation can be completely eliminated.

          What do you think? Do desperate times call for desperate measures, or should organ trafficking be considered a crime?

Drugs, Tourism, and The Golden Triangle

History of the Golden Triangle

            For years the Golden Triangle was the world leader in growing and dealing opium and heroin, and selling it to other countries, especially China. The major source of the drugs in Asia was located in an area where three Southeastern Asian countries met, namely Northern Thailand, Burma, and Laos, thus earning the name, the Golden Triangle. This area was a hot spot for growing brightly colored poppy fields and concealing heroine labs in the jungle. The geographical location was founded when an abandoned Chinese army retreated into the area of Thailand where the three countries met. The Thai’s and Chinese soldiers made a deal where the Chinese would live in a small community in the Northern area of Thailand in return for protection of the Northern border. Here the Chinese discovered mountains of poppy fields, which were used to make opium. Southern China stretched right above the area of the Golden Triangle, making it extremely easy to import opium, heroine, and methamphetamines (otherwise known as “ice”) into China.

From soldiers, to farmers, to calculators. The Golden Triangle has rich history; beginning with the Chinese army, transforming to a herd of opium farmers and drug dealers, and finally to calculators. But what does it mean to say calculators? Are the Thai’s and Chinese calculating their earnings off drugs? Is the Golden Triangle still the world’s leader in opium and heroine trading? What happened?

What happened to the Golden Triangle?

            The modern day Golden Triangle is surprisingly nothing like the Golden Triangle of the past. Previously the Golden Triangle produced 70 percent of the world’s opium that was transformed into heroin, and today it only produces 5 percent. So what happened? Essentially, China began to realize the detrimental affects that opium and heroin had on its citizens, thus resulting in stricter drug policies. Prior to the crackdown, the people of China began a market for the drugs, and cases of HIV increased due to contaminated needles.

It is practical to say that warlords and drug dealers do not care about the effects the drugs have on their customers, otherwise they probably would not be selling the world’s most addicting drug for an extreme profit. So how come the Golden Triangle is no more? The largest influence on the matter is the crackdown on poppy fields, and economic pressure from China. The realization of the detrimental effects of the drugs, coupled with the general lack of want for the drug has led to a shift in poppy field growth from Southeast Asia to Afghanistan, where the Taliban currently provides 92 percent of the world’s opium and heroin.

                

China’s major role in shutting down the Triangle

            Less than a decade ago, the Golden Triangle was outsourcing a huge abundance of opium, heroin, and “ice” into China. At one point, the Chinese law enforcement confiscated 5.3 tons of heroin, and 272 tons of raw chemicals used to make the drug. The Chinese officials investigated 187 drug cases, and 148 “ice” cases. These numbers are astounding, and took place when the Golden Triangle was at its prime. The Chinese stepped up its law enforcement, as well as encouraged others, to fight the war on drugs, and encourage farmers to plant other crops rather than opium.

The modern Golden Triangle?

            Coming back to the question previously stated, what does it mean to say that instead of opium farmers, there are calculators? Today, the Golden Triangle has been turned into a major tourist attraction in Thailand, Burma, and Laos. Lei states that those calculators have been busy calculating the benefits of tourism as resort operators. As of late, expensive and luxurious hotels have been popping up in the Triangle in hopes of capturing wealthy tourists willing to spend money in a getaway spot. The Golden Triangle contains rich history, and tourists are now finding it attractive to visit a resort in the area.

                              

          One article explains that the new and improved Golden Triangle is a gold mind for tourism. Shops are being set up everywhere selling opium scales, t-shirts, lighters, and other gear proving that tourists were really at the Golden Triangle. The main attraction of this spot is a sign in the jungle stating, “Northernmost Point in Thailand.” For a fee, tourists take picture in front of the sign, which usually has armed soldiers in the background. For another fee, Thai natives get in the picture as well to add more of an exotic feel. Along with constant sale of merchandise, and petty expenses like pictures, the resorts make a killing. Hotels such as Anantara and the Four Seasons are stationed near the Golden Triangle, attracting all sorts of tourists. These hotels charge rooms from $400-$2,000 per night! The switch from drug spot to clean tourist attraction is a relief for China, and will benefit the country as a result.

Transition

            The Golden Triangle was, and still is, a beast. It transformed from a moneymaking drug hotspot, to a tourist goldmine. China is ecstatic to rid the addictive drug from their country, and Thailand, Burma, and Laos are thrilled to be making the same money, in a clean and progressive way.


Mike Pirozzi