Chinese Communists’ 100th anniversary proves a boon for black market traders

The Chinese Communist party’s stoking of enthusiasm for its centennial celebration has had an unintended consequence: a booming black market for anniversary souvenirs, including pirated items churned out by unlicensed manufacturers.

Private sector factories and resellers have been racing to profit from the 100th anniversary of the party’s founding, which will be officially celebrated on Thursday.

One souvenir reseller in Yiwu, a manufacturing centre in eastern Zhejiang province, told the Financial Times he was charging authorised government clients Rmb3 ($0.46) a piece for centenary badges, while unauthorised private buyers had to pay Rmb3.5.

“This is a risky business,” said the reseller, who asked not to be named for fear of official retribution. “I need to set a proper margin.”

Party cadres are fuming. “We can punish you for placing a banner with the centenary logo in front of your company’s reception desk,” said an official at Beijing’s market regulation bureau, who asked not to be identified because he was not authorised to speak to the media.

“Don’t think about using the image unless the government asks you to do so.”

The Beijing regulator added that private businesses and individuals could not use the logo because the government was wary of their intentions. The official reluctance highlights the party’s often uneasy relationship with the private sector, which it fundamentally distrusts but also relies on to fuel economic growth.

“Only government agencies can use the logo because they have no intention to make a profit off it,” the official said. “There is no way for us to tell what a private company will do with the symbol. We assume everything it does has to do with business interest . . . Private companies have no role to play in the event.”

On Tuesday, President Xi Jinping presided over a ceremony that honoured 29 members with the party’s highest honour: the July 1 medal. Xi, who is also party general secretary, draped medals around the necks of military veterans, border guards, rural teachers and environmentalists. The list of honorees did not include any representatives of private enterprise.

The stage for the most recent tussle between the party and private sector was set in March, after the CCP propaganda department said the official centennial logo could only appear on products — ranging from bags to T-shirts — if they were used for celebratory rather than commercial purposes.

“It must not be misused or overused,” the department in a statement.

A second Yiwu entrepreneur complained that the propaganda department’s prohibition did not adequately define what constituted misuse of the logo.

For example, is it permissible to sell centennial memorabilia to party or government clients for a profit — and to private clients at cost, the distributor asked. “The rule has left many questions unanswered.”

Yiwu’s entrepreneurs are famous for their nimble response to fleeting market opportunities, repurposing their production lines every four years to produce campaign paraphernalia for US presidential candidates and their supporters.

Businesspeople complained that the party had whipped up demand for centenary souvenirs, which it then refused to make publicly available, giving rise to the black market it was struggling to rein in.

“The party doesn’t want anyone to make money off the celebration even though there is a strong, unfulfilled demand for relevant products,” said Jack Wang, an entrepreneur in southern Guangdong province. “But [many factory owners] can’t afford to miss this opportunity.”

Local governments, which are big buyers of the centenary-related goods, have disciplined numerous merchants for selling the souvenirs to private entities, according to official announcements.

In April, authorities in Shenzhen, the special economic zone bordering Hong Kong, fined a local firm Rmb600,000 for advertising a “special edition” anniversary wristwatch, even though it did not feature the party’s patented emblem.

The crackdown has been particularly frustrating for would-be private sector buyers who insist they only want to demonstrate their patriotism and that of their staff, many of whom belong to the 92m-member party.

“We want party members on our staff to wear centenary badges and wave centenary flags on July 1 to show their love for the country,” said a Yiwu-based factory owner who had to turn to black market suppliers. “We can’t get the material through formal channels.”

A local official was unsympathetic to patriotic factory owners’ plight. “There is nothing wrong if some ordinary party members can’t get a badge,” he said. “They are not for everyone.”

In China, however, enforcement varies dramatically across different regions.

Mike Wang, owner of a Shenzhen souvenir factory, had more luck convincing local officials to let him promote the centenary. Propaganda officials allowed him to sell 1,500 badges to an industry chamber for a profit — on condition that the chamber handed them out for free.

“We are doing this for the public good,” Wang said.