How do you say chutzpah in Chinese? Silk Street, central address for brand name knock-offs, has gone "legit" and launched SilkStreet brand ties and scarves. And counterfeiters better not copy them!

It was once described by China Daily news agency as "the third best-known tourist destination in Beijing after the Palace Museum and the Great Wall." According to the most recent figures, it attracts about 20,000 visitors daily (from 9am to 9pm) on weekdays and between 50,000 to 60,000 on weekends. In its 35,000 square meter complex, it houses 1,700 retail vendors and over 3,000 salespeople spread over seven floors with three levels of basements. Established in March 2005 to replace the old alley based Xiushui Market, the current Silk Street boasts of a diverse array of businesses. In addition to selling fashion apparel and accessories, it has now introduced traditional Chinese handicrafts, toys and electronic gadgets, as well as pharmacies, restaurants and multinational coffee chains – all in a bid to become the "ultimate one-stop tourist destination."

Many of the stalls have gained local and international reputation for selling counterfeit luxury designer brands at relatively low prices. And some have carried on this activity despite management pressures, Chinese government crackdowns, and lawsuits by famous name brand companies.

You can't blame them for not trying. According to Yin Xiaobo, an assistant to the GM of the Economic Management Center in Chaoyang District, Beijing, the new Silk Street complex was viewed as a more effective battleground in regulating and eradicating trademark infringements among private retailers. Since its grand opening on March 19th, 2005, Silk Street has conducted reforms in an attempt to regulate and crack down on IPR violations in the market. Despite the efforts, counterfeits were still found inside the shopping center. As a result, in April 2006, five global brand giants - Prada, Chanel, Louis Vuitton, Gucci and Burberry – were compensated with 20,000 yuan (US$2500) each from the Silk Street landlord and five of its stall holders. In June 7th, 2006 Silk Street management signed a deal with European luxury brands promising to evict tenants found violating trademark rights. To curb infringements of trademark rights, the stall holders contributed 30 million yuan (US$3.8m) to The Intellectual Property Rights Protection Fund. In August 2006, 30 vendors received 10 million yuan (US$1.3m) in rent refunds from that fund as a reward for respecting IPR protection laws. As of August 2006, an estimated 80% of vendors at Silk Street have acquired trademark authorization.

And now, for the ultimate in counterfeit cheek, the award goes to… Yes, the very same Silk Street! The market known worldwide for fake Armani belts and counterfeit Louis Vuitton handbags, and downloaded copies of the latest Hollywood films, has now turned around and launched its own SilkStreet brand of neckties, shirts and scarves. Of course, they're all "quality guaranteed" and "certified" by the Silk Street market. Furthermore, management has warned counterfeiters not to copy it.

Wang Zili, general manager of the market, was quoted by the Beijing Evening News as saying, “SilkStreet products are sold exclusively in the market. Anyone using the brand outside will be held liable.” Okaaaay…

To add to the hilarity, an article in People's Daily Online said with a straight face: "As a major step in the protection of intellectual property rights, the "Silk Street" brand of products was officially launched. Recently, the Beijing Commerce and Industry Bureau, Intellectual Property Office and other departments, jointly issued a trademark license to traders in Silk Street market."

The emergence of the Silk Street brand is symptomatic of the state of intellectual property protection initiatives in China. While there are visible signs of progress and extraordinary efforts, there are also signs of defeatism. While large quantities if fake goods have been seized, fakes are still everywhere. Many in China are less interested in the abstract theories of intellectual property than in creating much needed jobs.

In a recent survey by an industry association made up of 181 multinational companies, 28% of respondents said problems relating to the theft of intellectual property have eased; a slightly bigger percentage said things were getting worse. The rest say there is no change. With this in mind, is China at best controlling a problem, instead of eliminating it?