VZCZCXRO2650
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #7729 2290700
ZNR UUUUU ZZH
R 170700Z AUG 06
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0971
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS GUANGZHOU 027729 
 
SIPDIS 
 
USDOC FOR 4420/ITA/MAC/MCQUEEN, DAS LEVINE 
STATE FOR EB/TPP MASSINGA, FELSING 
STATE PASS COPYRIGHT FOR TEPP 
STATE PASS USPTO FOR DUDAS, BROWNING, BOLAND, ANTHONY, NESS 
STATE PASS USTR FOR MENDENHALL, MCCOY, ESPINEL, CELICO 
USDOJ FOR SUSSMAN 
DHS/CPP FOR PIZZECK 
USPACOM FOR FPA 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KIPR ECON CH
SUBJECT: Normalized Piracy: A Glimpse at DVD Shops in 
Guangzhou 
 
 
(U) This message is sensitive but unclassified.  Please 
handle accordingly. 
 
¶1. (SBU) Summary.  A recent visit to a number of Guangzhou 
stores selling pirated DVDs showed how embedded the industry 
is in the Chinese economy.  The relative ease with which 
these stores operate indicates that, at least in Guangzhou, 
recent crackdowns have not acted as a deterrent.  End 
summary. 
 
¶2. (SBU) On August 5, Econ/Pol intern visited a number of 
Guangzhou stores selling pirated DVDs, listed in a guide to 
the city.  The small stores, located amongst other stores on 
the ground floor of apartment building, had lists of DVDs 
with accompanying cover photos but without explanations of 
the films' plots.  Once a customer has made his selections, 
an employee goes up to an apartment where the DVDs are 
stored to fetch them.  Customers are often invited up to 
apartments to browse the selection directly; this happened 
to Econ/Pol intern in two stores. 
 
¶3. (SBU) Both apartments that Econ/Pol intern visited were 
people's homes on upper floors of the same building, which 
doubled as storage spaces for DVDs.  In both, the DVDs were 
located in spare rooms.  In the first apartment, a woman and 
her daughter, probably about eight years old, attended the 
approximately five customers.  In the other, a woman and a 
man who appeared to be in their twenties attended the 
approximately ten customers.  Each store had a large number 
of DVDs, about 2000 to 4000.  According to the employees, 
both stores have been in existence for over ten years. 
 
Comment 
------- 
¶4. (SBU) This visit revealed how the illegal practice of 
selling counterfeit DVDs has become normalized for many 
Chinese.  The shops at the ground level of the apartment 
were situated among stores selling other goods, and during 
this visit a policeman stood nearby.  The businesses do not 
need to keep on the move or remain underground; they have 
been in the same spot for over ten years.  In addition, it 
is noteworthy that enforcement against the ground floor 
shops would have no impact, since the actual product is 
located elsewhere.  This practice, which Congenoffs have 
also encountered in Shenzhen, allows the shops to be in a 
prominent location without risk of being shut down.  It's 
likely that this tactic is the result of previous 
crackdowns, and in past years the ground floor shops may 
have held the actual merchandise.  Nevertheless, for these 
shopkeepers the pirated-DVD business does not have the air 
of illegality that Westerners normally associate with it. 
End comment. 
 
MARTIN