The contraband in question is, of course, nothing less than the latest videogames from Japan and the United States. After years of turning a blind eye to the burgeoning illicit trade in pirated videogames, Beijing is suddenly talking tough. The games are “like opium,” says the government-run China Daily, and teens are turning into “addicts.” Videogames “create a bizarre and motley world with no teachers, homework and textbooks,” the paper says. “The craving for diversion can only grow.” The government has banned game playing at video parlors, the popular cybercafes where teens congregate during school hours, and the police have raided some establishments.
While Beijing cracks down on truants, however, the videogame pirates who are fueling the craze are getting off virtually scot-free. Now that China may soon join the World Trade Organization, Western and Japanese entertainment firms, infuriated over the loss of revenues, are watching closely to see how Beijing handles the piracy problem. So far it has conducted spot raids on shops that sell illicit videogames. Judging from the dozens of stores in the Jiaodaokou section of the city that appear to be doing a healthy business, the policy hasn’t been very effective.
Discouraging pirating is not going to be easy. About 95 percent of videogames sold in China are pirate copies, by some estimates. Games that would sell for $90 in the United States are copied onto CD-ROM discs and sold on the streets of Beijing for less than a buck. The problem is so bad that Sony refuses to sell its PlayStation 2 in China, despite huge demand. Kids, of course, still manage to buy the machines on the black market for 5,000 yuan ($604). “Any disc or machine sold in mainland China is either smuggled or counterfeit,” says Yoshiko Furusawa, an executive at Sony Computer Entertainment in Tokyo.
Ironically, pirates have greatly benefited from the Chinese government’s policy of encouraging entrepreneurship. Many pirating shops are based in government-sponsored technology-development areas. One outfit occupies a 9-meter-by-9-meter room in a granite-and-glass skyscraper in a new technology sector near Beijing University, where three young cyber-entrepreneurs churn out illicit discs. At a booth nearby, a young Chinese woman hawks their wares. “The Sony PlayStation 2 discs contain many sophisticated anti-piracy measures,” she says. “But we have broken all of them.”
It remains to be seen whether China decides to get serious about putting a stop to piracy. Local police only rarely apprehend street vendors and never bother their suppliers. And many of the biggest pirate-disc factories may be run by children of top party officials. In a 1995 battle between China and the United States, “it turned out that one of these factories was run by the People’s Liberation Army,” says U.S. trade official Joseph Papovich, “and that’s why it was not shut down.” And now that Chinese teenagers have gotten hooked, demand is not likely to abate any time soon.
