China, including Hong Kong, accounted for 93 per cent of the value of all intellectual-property infringing goods seized in 2024, according to a new report, which warned that the country's dominance in the global counterfeit economy poses direct threats to 'international trade and consumer safety.' The findings underscore a systemic challenge that extends well beyond trade statistics into public health and national security.

Scale of the Counterfeit Network

The report cited a 2025 assessment identifying 37 online markets and 32 physical markets worldwide that facilitate counterfeiting, with China hosting some of the most notorious hubs. Key physical centres include the Baiyun Leather Trading Center, Huaqiangbei Electronics Malls, Luohu Commercial City, Kinsun Market, and Wu'ai Market.

Although foot traffic at these physical locations has reportedly declined, they continue to function as distribution nodes for online sales and as 'sample testing' centres for counterfeit merchandise — effectively serving as the back-end infrastructure for a digital-first counterfeit supply chain.

Chinese e-commerce platforms including DHgate, DouyinShangcheng, Pinduoduo, and Taobao are identified as major facilitators of cross-border counterfeit sales, enabling sellers to reach consumers globally with minimal friction.

Health and Safety Risks to Consumers

The report flagged serious health hazards linked to counterfeit products, citing a 2023 South Korean government investigation that found certain counterfeit items contained carcinogens at levels 930 times above legal limits. 'Substandard counterfeit toys, electronics, and cosmetics can endanger consumers, while pirated digital content often exposes users to malware,' the report stated.

This comes amid growing global concern about the unregulated flow of consumer goods through informal online channels, where quality verification is largely absent.

Geopolitical and Strategic Dimensions

Analysts cited in the report alleged that the Chinese Communist Party (CCP) benefits directly from intellectual property theft, with counterfeit production and economic espionage reportedly aiding military modernisation. 'Economic espionage and counterfeit production provide access to advanced technologies with dual civilian-military applications, including artificial intelligence and surveillance systems,' the report noted.

Experts estimated that China's theft of US intellectual property alone costs the American economy up to $600 billion annually, according to the report. Notably, this figure has been cited in multiple prior assessments, though independent verification of the precise estimate varies by methodology.

Calls for International Action

The report called for stronger international cooperation and enhanced customs enforcement, alongside technological solutions such as blockchain-based supply-chain verification and public awareness campaigns to suppress consumer demand for counterfeit goods. 'The counterfeit crisis has become a geopolitical weapon, undermining trust in global trade and eroding innovation,' the report concluded.

Experts argue that without coordinated multilateral action, the structural incentives sustaining counterfeit production are unlikely to diminish, particularly as cross-border e-commerce continues to expand at pace.